The NPD Group Releases Results of Second Study in a Series on U.S. Consumers and The Economy

Business Wire, April 18, 2008

PORT WASHINGTON, N.Y. -- The NPD Group, Inc., a leading market research company, released the results of its second research study in the series called: Fast Checks Study: Consumers Speak Out On the U.S. Economy.

As 2008 continues, the results of this second study indicate that overall recession concerns grow, and consumers' own concerns are evident. In just two months, the number of consumers who said the U.S. is in or heading toward a recession or economic slowdown grew from 79% to 84%. "Consumers generally are the last to react to economic downturns; they don't want to halt or cut back on spending, but it is clear they're beginning to throttle back." stated Marshal Cohen, chief industry analyst, adding, "That's not necessarily bad news. Since the consumer lags, we should start seeing signs of recovery in the early indicators."

There are some bright spots in the survey's results. Consumers told NPD that they are least likely to pull back their spending on toys, video games, and home improvement. "We know people don't want to deprive their kids of presents, and consumers aren't willing to give up their passion for video games - these kinds of giving and getting are on track to continue." said Cohen. "Home improvement is interesting. Consumers clearly recognize a need to spruce up their homes, whether it's to sell them or make repairs and improvements if it looks like they'll stay in their current homes for the long haul. So we can expect current, sluggish home improvement sales to improve."

However, there are some industries that will most likely feel the pinch of consumers' spending cutbacks, and they are: dining out, apparel, and home entertainment. Cohen noted, "These are three areas more consumers said they would cut back spending on."

When asked about their plans for using the money from their U.S. Government rebate check, 42% of respondents said they plan to pay down their bills. "Again, this could be good news for retailers. If consumers pay off their debts right when they get their checks, the next month they will be out shopping again," said Cohen.

What will you do with you government rebate check?  <

Pay Down Bills                                      <
42%
Save It                                             <
21%
Do Not Qualify for Rebate Check                     <
14%
Spend on Discretionary Items                        <
12%
Other                                               <
11%

"In times of economic uncertainty we would expect to see a hike in job-related concern." said Cohen. "However, 40% of respondents said they are very or somewhat concerned about job security, which is very close to what we see in 'normal' times."

Methodology: The NPD Group fielded this study using Fast Checks*. This Fast Checks survey was fielded to a nationally representative sample of 2,000 men and women ages 18 and older. The data has been weighted. The data presented in this report was collected from 784 total respondents. The survey was fielded Wednesday, April 2nd to April 9th, 2008.

*NPD's Fast Checks surveys are quick, flexible, and budget-conscious online surveys.

About The NPD Group, Inc.

The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,600 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us or visit http://www.npd.com/.>

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