Toby Smith

Worst Consumer Spending Outlook on Record

by Toby Smith   12/22/08

Consumer Electronics and Home Entertainment

We're at the peak of the holiday season, so it's not surprising that electronics spending has registered a slight uptick for the second consecutive month.

Nonetheless, it remains far weaker than past holiday seasons. Only 23% said they'll spend more on consumer electronics going forward -- up four points since the previous survey -- while 43% said they'll spend less.

Amazon.com (AMZN) (up two points to 23%) and Apple (AAPL) (up two points to 11%) are the clear momentum leaders in terms of home entertainment and networking shopping. Circuit City (CCTYQ) (down five points to 9%) and Target (down three points to 5%) show the greatest weakness going forward.

As for industry giant Best Buy (BBY), there continues to be critical warning signs . Only 7% of respondents said they'll spend more money there during the next 90 days compared with this time last year. And 36% said they'll spend less money there -- a net seven points worse than previously.

Sentiment Turns Even More Negative

We also asked respondents about their current impressions of the economy, and 66% said they think the overall direction of the U.S. economy will worsen during the next 90 days -- nine points worse than a month ago.

Only 9% said they believe that the economy will improve, which is six points worse than the previous survey.

Moreover, 64% reported that they are dissatisfied with their personal finances (unchanged from November), while just 4% said they are very satisfied (also unchanged).

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Toby Smith is the founder and editor of ChangeWave Investing and ChangeWave Inner Circle. Read his bio here.

The ChangeWave Alliance Research Network is a group of 20,000 highly qualified business, technology and medical professionals -- as well as early adopter consumers -- who work in leading companies of select industries. ChangeWave surveys its network members weekly on a range of business and consumer topics, and converts the information into a series of proprietary quantitative and qualitative reports.