Show rr BABSON'S S nE REPORT OnT Roger 1 W. W DaboB Consumer Habits t S S Soon on many millions ot of Americans Amer Amer- will be receIving sizable amounts or of extra cash as federal withholding taxes are cut Some or of my friends who own retail stores figure they are sure to got get the lions lion's share or of this money But Dut I think these people may be counting their chickens before the they are hatched here lIere are my reasons FREEDOM l OF CHOICE During the and the early fairly steady increases increases in- in creases in personal income brought a great many ot of the nations nation's households up to an adequate standard or of living Hence the substantial add add- lions to spending power which many families will get from the tax cut will represent discretionary dis income TillS THIS MEANS IEANS people will have bave more freedom of choice as to what they will buy than they have usually had Their attitudes and their buying pat terns may determine to what extent retail stores will benefit from the tax cut and from the economic growth that lies ahead SERVICE BUSINESSES Retail stores should certainly certain certain- ly do betterin 1964 because of the tax cut But Dut it is' is not going to be the bonanza some storekeepers storekeepers store store- keepers are arc expecting Living standards are high and rising This means people are going to spend an Increasing t tape gc of their incomes for such things as Insurance household and personal services and rec and travel TilE OLD LINE merchant who expects customers will continue to fill their shopping baskets with the same types of goods they bought when they were not so well ort off may maybe maybe be in for an awakening I forecast further growth in service businesses In 1964 Best Dest gains will be bC in prIvate education and research for Cor eign travel and money ing I predict that private spending for educational purposes pur poses in 1964 will top figures THEY TIlEY WILL BUY Today food shelter and clothing take about om third one of all family income but the ratio is declining every month In another ten years these items may use a much smal ter ler share From now on people will be able to spend more for wants instead of oC needs Consumers Consumers Con Con- sumers will become better educated ed 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 other things besides These will mostly be comforts and semi senti The average aver aver- age work week in America has not shortened very much in the past 20 years but emphasis em em- on leisure time and making the most ot of it has in In- creased The desire to travel and to enjoy to the full holidays and vacations is a powerful force Influencing buyers buyers' attitudes and lInd behavior lor I predIct a good increase in dollars spent for travel in 1964 versus 1963 In addition I look for big boosts in spending for Cor sports clothes boats fishing tackle and many other o 0 n a 1 wants MARKETS 1 OF TOMORROW TOl The amount or of I. I installment debt contracted to help finance expensIve vacations and other servIces and to pay debts accumulated accumulated ac ac- cumulated as people have sought a higher standard of living is not yet large in hi relation re re- lation to total income But Dut I forecast It will grow fast and that it will be Important in shaping the mark ts A ot ottom tom tomor- tomor r. r row MOST 1 LIBERAL unemployment ment and social security pay ments along with more generous gen gen- erous crous pensions from private employers will encourage people peo- peo pie to spend sP nd more Their spending habits will wiil be based increasingly on n s sand sand and expectations instead of on current income You can ex ex- pest consumers to be more se- se from from now on for they are arc going to have more and more 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 I Two farmers met on the rod road Si Ive I've got g a mule with distemper What did you give that one of yours when lie lle had hadIt It Turpentine A they met again Say SI I gave my mule turpentine and It killed him It killed mine too |