Survey: Consumers to Spend Tax Rebate Money on Debt
Las Vegas With over a third of the federal tax rebate money already distributed, consumers mostly intend to use the money to pay down debt, according to the findings from a special International Council of Shopping Centers (ICSC) tax rebate survey that was conducted by Opinion Research Corp.
The survey found that 51% of consumers receiving a rebate intended to use it to pay off debt, which was up considerably from consumer intentions earlier in the year.
Of those taxpayers that have not already received the rebate, the percent of consumers intending to pay off debt was an even higher 55%.
Moreover, households with income of $50,000 or less were more likely (61.5%) to earmark those rebates for debt reduction.
“Although the lion’s share of the rebate money will not be spent, the nearly 22% of the rebate that is likely to end up in the spending stream will still boost consumer spending by nearly $25 billion,” said Michael P. Niemira, VP, director of research and chief economist for the ICSC.
With some retailers offering consumer incentives to spend the rebate money, consumers reported that retailer incentives tied to grocery items would most likely (52%) cause them to take advantage of those promotions. The second most attractive (42%) use of rebate money was on retailer incentives tied to energy-efficiency products for the home, the report said.
Earnings to face extra scrutiny
Look for first-quarter financial results due out tomorrow from Target to be scrutinized even more closely than normal, as undecided investors in the company’s proxy contest get a new set of numbers on which to base their vote.
Swing voters may be disappointed, however, as the company already revealed it would beat analysts’ estimates of earnings per share of 52 cents that were in place at the time the company reported a slight uptick in April same-store sales. Analysts’ now project the company will earn 59 cents a share. The company’s top line challenges are well documented, as such discretionary categories as home and apparel remain under pressure, and monthly results for the quarter have already been reported. Improvements in profitability therefore will come largely as a result of expense control. That’s not as good as driving profits through sales, but it could be enough to persuade swing voters to side with the company’s existing slate of directors.
Court approves sale of Sharper Image
SAN FRANCISCO The United States Bankruptcy Court for the District of Delaware has approved the sale of Sharper Image. The court agreed to allow the company to sell all or part of its assets at an auction to be held on May 28.
In connection with those procedures, the court also authorized the company’s entry into an asset purchase agreement and an agency agreement, each dated May 13, with a joint venture of Gordon Brothers Retail Partners, GB Brands, Hilco Merchant Resources, and Hilco Consumer Capital. Hilco/GB Joint Venture will serve as a stalking horse bidder for the purposes of the auction.
On April 24, Sharper Image reported that it has decided to pursue a sale of its business and assets pursuant to the provisions of the bankruptcy code and will solicit indications of interest from potential acquirers.