If results from a new survey are any indication, many Americans will spend their federal tax rebates on necessities, not discretionary items. 

In a survey conducted from April 29 to May 7, the National Retail Federation (NRF) finds that most consumers will use their rebate checks to pay for gas (17.2 million people) and many will put the money toward everyday purchases at their local supermarkets (21.2 million people).

"The rising cost of groceries and gasoline means that discretionary spending is taking a backseat to necessities," says Tracy Mullin, NRF president and CEO. "For many consumers, struggling with rising bills and lowering home values, economic stimulus checks could not come at a better time."

Consumers are not only stressed about their personal finances, they're also growing pessimistic about the country's economic future, according to the Reuters/Zogby Index, a poll that measures "the mood of the country."

"Consumer confidence fell to a 28-year low this month as rising prices strained household finances, the economy shed jobs, the housing market struggled and the cost of gasoline rose to $4 a gallon," the Index states. Pollster John Zogby adds that many consumers believe the situation is bound to get worse: "A majority of Americans expect gas prices to eventually hit $5 a gallon."

David Hope, AAF, AIFD, of Flower Gallery in Washington, D.C., says offering free delivery on Web site business has helped to bolster online sales. While everyday sales are down for the shop, compared to last year, online sales for Valentine's Day and Mother's Day were up.  "I was really surprised we did more this year [on the holidays] than last year," he says, despite not spending significantly on marketing.

--Cassandra P. Foster
cfoster@safnow.org

 

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