Survey: Consumers “Spending Like There’s No Tomorrow” Despite National Debt
Columbus, Ohio, BIGresearch’s April Consumer Intentions and Action Survey revealed 31% of the 8,000 polled consumers agree or strongly agree with the spending philosophy of “I live for today because tomorrow is uncertain” despite consumer debt on the rise. “The spending philosophy of those consumers who ‘live for today’ is no surprise in light of soaring debt statistics nationwide,” Joe Pilotta, VP of research for BIGresearch, said in a statement. “What is surprising are the types of people who actually live this big spending philosophy. While the strongly agreed/agreed response was spread fairly evenly over 18- to 54-year-olds, there was a definite division along income lines.”
Bankruptcy filings are up 30% as of Dec. 31, 2005, according to the Federal Judiciary System, and the Federal Reserve showed that personal savings hit -.07 in January, the lowest point since the Great Depression. MSN Money reported that the average household credit card debt is between $8,000 and $10,000, yet consumers continue to rack up debt on pricey items like cars and electronics.
Winn-Dixie Charged in Lobster Violation
Jacksonville, Fla., Winn-Dixie Stores, Inc. has been charged with illegal possession, transportation and sale of undersized spiny lobster. Winn-Dixie, which is currently trying to exit bankruptcy, allegedly sold undersized spiny lobster in Miami and elsewhere in 2002. Florida law requires that the lobsters, which live in waters from Florida to Brazil, must have a minimum tail length of 5.5 inches before they are harvested. The U.S. Attorney’s Office in Miami said in a statement said Winn-Dixie faces possible fines and probation of up to five years.
Federated Completes Second Transaction with CitiGroup
Cincinnati, Ohio, Federated Department Stores, Inc. completed a second transaction related to its previously announced sale of Federated and May Department Stores Co.’s credit card receivables to Citigroup. The transaction, covering receivables that Federated has repurchased from General Electric Capital Corp. entities, yielded a pre-tax gain of approximately $179 million ($112 million after tax). These proceeds will be used to repay the short-term debt associated with Federated’s acquisition of May Co., which was completed on Aug. 30, 2005. Under the terms of an agreement, Citigroup will purchase all Federated and May Co. credit receivables in several separate transactions at a premium of approximately 11.5%. The transactions are expected to produce after-tax proceeds of approximately $4.6 billion.