NEWSLETTERS

NEWSLETTERS - Sliding Consumer confidence fuel uncertainty for consumers

NEWSLETTERS

Sliding Consumer confidence fuel uncertainty for consumers

Consumer confidence fell unexpectedly in October as job prospects remained bleak, a private research group said Tuesday, fueling speculation that an already gloomy holiday shopping forecast could worsen. The Consumer Confidence Index, released by The Conference Board, dropped to 47.7 in October -- its second-lowest reading since May. 

"Consumers also remain quite pessimistic about their future earnings, a sentiment that will likely constrain spending during the holidays," said Lynn Franco, director of The Conference Board's Consumer Research Center. 

Consumer confidence plays a factor with rent-to-own as more consumers use the rent-to-own transaction to protect themselves if their income falls or lose their job. The rent-to-own business model saves consumers from legally obligated debt and financial commitment during uncertain times. Add to the fact that credit is tightening and interest rates rapidly increasing, rent-to-own becomes a much more attractive option in today's economy.
 
"The rent-to-own industry is recession proof," remarks Todd Evans, Aarons Vice President of Franchising. "The current climate has shown American consumers there are other choices to a refrigerator in your home or a computer for your child without the debt and the many penalties that occur if payments cannot be made."
 
The Consumer confidence index reached a historic low of 25.3 in February to 53.4 in September. A reading above 90 means the economy is solid. More than 100 shows strong growth. Economists watch consumer confidence because spending on goods and services by Americans reflect 70 percent of U.S. economic activity by federal measures. 

The recent figures showed that shoppers have a grim outlook for the future. The Conference Board expects a worsening business climate, fewer jobs and lower salaries. Economists predict holiday sales to be similar as last year, which saw the biggest declines since 1967 when the Commerce Department started collecting the data. 

Economists gauge the retail industry and do not gauge the rent-to-own industry because it represents a small percentage of consumer spending. Economic trends show rent-to-own business activity remains solid in good and bad economic times. During times of uncertain futures for consumers or unusually high interest rates, rent-to-own historically does well. 

"That's how the rent-to-own business became an industry," states Ed Winn, APRO's General Counsel. "The 1970s economy had skyrocketing interest rates so consumers flocked to rent-to-own and in a span of 5 years consumers created the rent-to-own industry that has served them well since."



2012 APRO Convention and Trade Show

July 24-26, Memphis, TN

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RTOHQ: The Magazine
RTOHQ: The Magazine is the Association of Progressive Rental Organizations' award-winning rent-to-own industry magazine, and it's available here.

CLICK HERE FOR OUR DIGITAL RTOHQ: THE MAGAZINE

 

RTOHQ: The Magazine’s upgraded digital format

APRO's new, mobile-ready magazine is now available in addition to our print edition. The digital format provides the same informative content as our printed magazine, but also offers tools to make the reading experience more enriching. Access the table of contents page with one click or tap. Get additional information from advertisers by clicking on the links in their ads. The interface is easy to navigate and requires no special app—read our magazine on your computer, digital table or smartphone. Click here to access the digital version of RTOHQ: The Magazine March-April 2012.

 

 

A New Rent-to-Own Experience

by Neil Ferguson

Here’s the lowdown on APRO’s 2012 Convention and Trade Show, July 24-26 in Memphis. The RTO industry’s big event will offer many valuable experiences, including insights on how to turn your stores into “experiences”–the good kind for consumers

 

Who Is Your Competition?

by Bill Keese

In order to expand your customer base, you can learn a lot by observing your competitors. But first, you need to figure out just who they are. If you think your only competition is the rent-to-own store down the street, you’re not considering the bigger picture. APRO’s executive director offers a big-picture perspective.

 

A Review of Online Customer Complaints

by Ed Winn III

While rent-to-own companies have not cornered the market on negative reviews posted on consumer complaint websites, it’s no surprise that there are cyberspace beefs against RTO. APRO’s general counsel reviews some of them in search of a pattern and he considers appropriate response to online complaints.

 

Rent-to-Own Families, Part VIII

by Kristen Card

Our series of family-run rent-to-own businesses continues with profiles of the Homeiers in Kansas and two Texas-based sets of kindred colleagues, the Spangles and the Weisblatts.

 

 

Future issues of APRO's magazine will be available in this same new format. Click here to access past issues that are not yet archived in the new interface.

 

Association of Progressive Rental Organizations
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Fax 512/794-0097