| Show t BABSON'S AUTHENTIC STATEMENT n W gym Dab Special to THE TUE EXPRESS I I BABSON DISCUSSES CONSUMER SPENDING HABITS BABSON PARK MASS MASS- Soon many millions of Amer leans will be receiving size size- sizeable able amounts of extra cash as federal withholding taxes are cut Some of my friends who own retail stores figure they are sure to get the lions lion's share of this money But I think these people may be counting their chickens be- be before before fore they are hatched Here are my reasons Consumers Today Have More Freedom of Choice During the and the early fairly steady In in- in increases creases in personal Income brought a great many of the nations nation's households up to an adequate standard of living Hence the substantial addi lions to spending power which many families will get from the tax cut will represent sent discretionary income This means people will have more freedom of choice as to what they will buy than they have usually had Their attitudes and their buying patterns may determine to what extent retail stores will benefit from the tax cut and from the economic growth that lies ahead Service Businesses will wUl Prosper Retail stores should cere certainly do better in 1964 be- be because because cause of the tax cut But It is not going to be the bonanza sonic some storekeepers are ex ex- ex expecting Living standards are high and rising This means menns people are going to spend an increasing percentage of their incomes for such things as insurance household and per per- personal services and recreation and travel The old line mer mer- mer merchant chant who expects customers will wUl continue to fill their shopping baskets with the same types of goods they bought when they were not so wen well off may be In for an awakening I forecast further growth in service businesses in 1964 Best gains will be In private education and research for lor eign travel and money lend Ing I predict that private spending for educational pur poses In 1964 will top figures What Consumers Will Buy Today food shelter and clothing take about third one of all family Income but the ratio is declining every month In another ten tea years these Items may use a much smaller share From now on people will be able to spend more for wants instead of needs Consumers will be be- become come better educated more chooSY and more spoiled They will still purchase food shelter and clothing items In good volume but they will also buy a great many things besides These will mostly bo be comforts and semi luxuries The aver aver- average age work week In America has not shortened very much in the past twenty years but emphasis on leisure time and making the most of it has in creased The desire to travel and to enjoy to the full boll holi- holidays days and vacations is a pow pow- powerful erful force influencing buy buyers ers attitudes and behavior I predict a good Increase In dollars spent for lor travel In 1964 versus 19 1963 13 In addition I look for big boosts in spend spending Ing for sports clothes boats fishing tackle and many oth er recreational wants Markets Markell of Tomorrow The amount of installment debt contracted to help flu fill ante ance expensive vacations and other services and to pay debts acc accumulated as people have sought a higher standard of living is not yet large In relation to to total l Income But ButI I forecast it will grow fast and that it will be important in shaping the markets of to to- to tomorrow morrow More liberal unemployment ment and social security pay pay- along ments-along with more gen generous erous pensions from private employers will encourage people to spend more Their spending habits will be based Increasingly on aspirations and expectations Instead ot of oton on current income You can expect consumers to be more selective from now on for they are going to have more and more mere money to spend as they please and they know what they want On the other hand those who do succeed In selling them will be very well rewarded |
