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Black Consumers' Share of Wallet - US - January 2013

“Black median household income decreased by slightly more than $2,000 from 2008-11, more so than for any other ethnic or racial group. Yet, prices for everyday essentials such as food, transportation, and utilities continue to rise. This means that Black household budgets are being shifted from discretionary categories such as apparel, entertainment, and personal care to cover more essential household expenses.”

– Leylha Ahuile, Senior Multicultural Analyst

Some questions answered in this report include:

  • How is the economy affecting the choices Black consumers make in the marketplace?
  • What household expenses are taking a greater share of Black households’ budget?
  • Compared to 2010, how has spending and saving changed for Black consumers?

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Expenditure
          • Data sources
            • Consumer survey data
              • Advertising
                • Abbreviations and terms
                  • Abbreviations
                  • Executive Summary

                      • Category expenditures
                        • Black household expenditures increased in almost all categories at a higher rate than other households
                          • Figure 1: Percent change of average annual expenditures 2003-11, by category and race of reference person, 2011
                        • Blacks spend higher percentage of income on housing, apparel, cash contributions
                          • Figure 2: Distribution of average annual expenditures, by category and race of reference person, 2011
                        • Higher income Black households report spending more this year
                          • Figure 3: Changes in spending habits, by household income, 2010 and 2012
                        • Households spending more on basic necessities, cutting back on other items
                          • Figure 4: Changes in household spending, October 2012
                        • The consumer
                          • Black consumers less likely to say they are significantly worse off
                            • Figure 5: Economic status in the last 12 months, by race/Hispanic origin, April 2011-June 2012
                          • Black respondents least likely to report being good financial managers
                            • Figure 6: Attitudes toward personal finance, by race/Hispanic origin, April 2011-June 2012
                          • Black purchasing power
                            • Figure 7: Purchasing power, by race/Hispanic origin, 1990-2017
                          • U.S. Black population
                            • Figure 8: Population, by race/Hispanic origin, 2008-18
                          • Blacks have lowest median income compared to other groups
                            • Figure 9: Median household income, by race and Hispanic origin of householder, 2011
                          • What we think
                          • Issues in the Market

                              • How is the economy affecting the choices Black consumers make in the marketplace?
                                • What household expenses are taking a greater share of Black households’ budget?
                                  • Compared to 2010, how has spending and saving changed for Black consumers?
                                  • Trend Applications

                                      • Trend: No Degree, No Problem
                                        • Trend: Prepare for the Worst
                                          • 2015 Trend: Old Gold
                                          • Black Purchasing Power

                                            • Key points
                                              • Household income
                                                • Blacks have lowest median income compared to other groups
                                                  • Figure 10: Median household income, by race and Hispanic origin of householder, 2011
                                                  • Figure 11: Median household income, by race and Hispanic origin of householder, 2008 and 2011
                                                • Two fifths of Black households earn less than $25K
                                                  • Figure 12: Household income distribution for all households and Black households, 2011
                                                • Changes in household income
                                                  • From 2008-11, number of Black households earning less than $25K increases
                                                    • Figure 13: Household income distribution for Black households, 2008 and 2011
                                                  • Households earning more than $50K decreased from 2001-11
                                                    • Figure 14: Share of Black households with incomes of $50K or more versus total U.S. households, 2001, 2006, and 2011
                                                  • Those earning less were more likely to see a decline in household income
                                                    • Figure 15: Changes in household income, by household income, October 2012
                                                  • College-educated Black consumers most likely to see income increase
                                                    • Figure 16: Changes in household income, by education, October 2012
                                                  • Household size
                                                    • Blacks most likely to live in one-person households
                                                      • Figure 17: Household size, by race/Hispanic origin of householder, 2011
                                                    • Purchasing power
                                                      • Black purchasing power expected to rise significantly by 2017
                                                        • Figure 18: Purchasing power, by race/Hispanic origin, 1990-2017
                                                        • Figure 19: Purchasing power, by race/Hispanic origin, 1990-2017
                                                      • Buying power concentrated in South and Northeast
                                                        • Figure 20: Top 10 states/regions with the largest share of Black buying power, 2012
                                                      • Growth in other areas due to Black migration
                                                        • Figure 21: Top 10 states, by rate of growth of Black buying power, 2000-12
                                                      • Affluent Blacks most prevalent in Northeast
                                                      • Changes in Household Expenditures

                                                        • Key points
                                                          • Increase spending
                                                            • Blacks increased spending at higher rates than other consumers for most categories
                                                              • Figure 22: Amount of average annual expenditures for black CUs, by category, 2011
                                                              • Figure 23: Amount of average annual expenditures of all CUs, by category, 2011
                                                            • Annual expenditures
                                                              • Black households under index for healthcare, education, and entertainment
                                                                • Apparel and personal care items have higher index levels
                                                                  • Figure 24: Average annual expenditures indexed to all CUs, by race of reference person, 2011
                                                                • Blacks spend highest percentage of expenditure budget on housing
                                                                  • Figure 25: Distribution of average annual expenditures, by category and race of reference person, 2011
                                                                • Changes in household spending
                                                                  • Respondents spending more on basic needs, less on discretionary items
                                                                    • Figure 26: Changes in household spending, October 2012
                                                                    • Figure 27: Changes in household spending, November 2009
                                                                • High Index Expenditure for Black Households

                                                                  • Key points
                                                                    • Apparel and services
                                                                      • Apparel is significant spending category for Black consumers
                                                                        • Figure 28: Distribution of average annual expenditures, by category and race of reference person, 2011
                                                                      • From 2008-11 Black spending on apparel has dropped more than other races
                                                                        • Figure 29: Average annual expenditures on apparel, by Black and other races, 2008 and 2011
                                                                      • Black consumers spend most on footwear and apparel for young people
                                                                        • Figure 30: Distribution of average annual expenditures for apparel and services, by race of reference person, 2011
                                                                      • Those earning $75K+ are spending more on clothing and footwear
                                                                        • Figure 31: Changes in household spending on clothing and footwear, by household income, October 2012
                                                                      • Personal care
                                                                        • Black households spend more on personal care services versus products
                                                                          • Figure 32: Distribution of average annual expenditures for personal care, by race of reference person, 2011
                                                                        • Black consumers making different choices with personal care budget
                                                                          • Figure 33: Distribution of average annual personal care expenditures by black consumers, 2008 and 2011
                                                                        • Housing
                                                                          • Black consumers more likely to rent
                                                                            • Figure 34: Distribution of average annual expenditures for shelter, by race of reference person, 2011
                                                                          • Black households earning less than $25K most likely to be spending more on mortgage/rent
                                                                            • Figure 35: Changes in household spending on mortgage/rent, by household income, October 2012
                                                                          • Distribution of housing expenditures
                                                                            • Figure 36: Distribution of average annual expenditures for housing, by race of reference person, 2011
                                                                          • Respondents with a college degree spending more on mortgage/rent
                                                                            • Figure 37: Changes in household spending, by education, October 2012
                                                                          • Transportation
                                                                            • Black CUs have seen significant increase in transportation spending in past eight years
                                                                              • Figure 38: Percent change of average annual expenditures 2003-11 for transportation, by race of reference person, 2011
                                                                            • Blacks spend more on gasoline compared to other races
                                                                              • Figure 39: Distribution of average annual expenditures for transportation, by race of reference person, 2011
                                                                            • Those earning $75K+ slightly more likely to be spending more on transportation
                                                                              • Figure 40: Changes in household spending on transportation, by household income, October 2012
                                                                            • Beyond housing, household expenses
                                                                              • Aside from rent/mortgage, utilities and groceries are the top household expenses
                                                                                • Figure 41: Top three household expenses, by age, October 2012
                                                                              • Household income does not have a significant impact on highest household expenses
                                                                                • Figure 42: Top three household expenses, by household income, October 2012
                                                                              • Food
                                                                                • Respondents spending more on groceries
                                                                                  • Figure 43: Changes in household spending on groceries, by household income, October 2012
                                                                                • Black households spend a lower percentage of their food budget on dining out
                                                                                  • Figure 44: Distribution of average annual expenditures for food and beverages, by race of reference person, 2011
                                                                                • Blacks under index for alcohol expenditures
                                                                                  • Figure 45: Average annual expenditures indexed to all CUs for food and beverages, by race of reference person, 2011
                                                                              • Low Index Expenditures for Black Households

                                                                                • Key points
                                                                                  • Personal insurance and pensions
                                                                                    • Blacks spend less on personal insurance and pensions when compared to other races
                                                                                      • Figure 46: Average annual expenditures for CUs for personal insurance and pensions, by race of reference person, 2011
                                                                                    • Black adults less likely to have health insurance than the average consumer
                                                                                      • Figure 47: Ownership of health insurance, by race/Hispanic origin, April 2011-June 2012
                                                                                    • Lower-income households are the least likely to have insurance
                                                                                      • Figure 48: Ownership of health insurance, by household income, April 2011-June 2012
                                                                                    • Healthcare and medical expenses
                                                                                      • Black households spend more on health insurance, less on medical services
                                                                                        • Figure 49: Distribution of average annual expenditures for healthcare, by race of reference person, 2011
                                                                                      • About a quarter of all income brackets spending more on medical expenses
                                                                                        • Figure 50: Changes in household spending on medical expenses, by household income, October 2012
                                                                                      • Entertainment
                                                                                        • About two fifths of Black households report spending the same or less on entertainment
                                                                                          • Figure 51: Changes in household spending on entertainment, by household income, October 2012
                                                                                        • Entertainment spending focused on audio and visual equipment
                                                                                          • Figure 52: Distribution of average annual expenditures for entertainment, by race of reference person, 2011
                                                                                        • Education
                                                                                          • Spending on college tuition lower than other groups
                                                                                            • Figure 53: Distribution of average annual expenditures for education, by race of reference person, 2011
                                                                                          • Blacks owe more than Whites on student loans
                                                                                            • Figure 54: Total amount owed on student loans, by race/Hispanic origin, December 2011
                                                                                          • One fifth of those earning $75K+ are spending more on education
                                                                                            • Figure 55: Changes in household spending on education, by household income, October 2012
                                                                                        • Spending and Saving Habits

                                                                                          • Key points
                                                                                            • Changes in spending habits
                                                                                              • Blacks report spending more in 2012 compared to 2010
                                                                                                • Figure 56: Changes in spending habits, 2010and 2012
                                                                                              • Black women report spending less in 2012
                                                                                                • Figure 57: Changes in spending habits, by gender, October 2012
                                                                                              • Blacks in higher-income brackets most likely to spend and save more
                                                                                                • Figure 58: Changes in spending habits, by household income, October 2012
                                                                                              • Changes in spending and saving habits of higher-income households
                                                                                                • Figure 59: Changes in spending habits, by households with an income of $50K+, 2010 and 2012
                                                                                              • Changes in savings
                                                                                                • Even among savers, most save less than $250 a month
                                                                                                  • Figure 60: Monthly saving habits of households that save money, 2010 and 2012
                                                                                                • More than a third of those earning $75K save more than $500 a month
                                                                                                  • Figure 61: Monthly saving habits, by household income, October 2012
                                                                                              • Attitudes Toward Personal Finance

                                                                                                • Key points
                                                                                                  • Economic status
                                                                                                    • Majority of Black consumers say they are better off or the same financially compared to a year ago
                                                                                                      • Figure 62: Economic status in the last 12 months, by race/Hispanic origin, April 2011-June 2012
                                                                                                    • Black consumers are optimistic about future financial wellbeing
                                                                                                      • Figure 63: Economic status in the next 12 months, by race/Hispanic origin, April 2011-June 2012
                                                                                                    • Black respondents most likely to report bad habits with personal finances
                                                                                                      • Figure 64: Attitudes toward personal finance, race/Hispanic origin, April 2011-June 2012
                                                                                                    • Discretionary income
                                                                                                      • One fifth of Blacks say they will make a major purchase in next month
                                                                                                        • Figure 65: Likelihood of making a major purchase in the next 30 days by race/Hispanic origin, April 2011-June 2012
                                                                                                      • Young Blacks most likely to treat themselves to something extra
                                                                                                        • Figure 66: Attitudes toward monthly expenses, by age, October 2012
                                                                                                      • Attitudes toward monthly expenses
                                                                                                        • Fewer Black respondents say they can only afford basic necessities now than in 2010
                                                                                                          • Figure 67: Attitudes toward monthly expenses, by age, October 2012
                                                                                                        • Perception about what households can afford may be shifting as economy improves
                                                                                                          • Figure 68: Attitudes toward monthly expenses, by household income, October 2012
                                                                                                          • Figure 69: Attitudes toward monthly expenses, by household income, 2010 and 2012
                                                                                                      • Marketing Strategies

                                                                                                        • Key points
                                                                                                          • TV advertising
                                                                                                            • Tide
                                                                                                              • Figure 70: Tide, TV ad, 2013
                                                                                                            • Chrysler
                                                                                                              • Figure 71: Chrysler, TV ad, 2012
                                                                                                            • Nike
                                                                                                              • Figure 72: Nike, TV ad, 2013
                                                                                                            • John Frieda
                                                                                                              • Figure 73: John Frieda, TV ad, 2012
                                                                                                            • McDonald’s
                                                                                                              • Figure 74: McDonald’s, TV ad, 2012
                                                                                                            • Online strategies
                                                                                                              • Cîroc
                                                                                                                • Print strategies
                                                                                                                  • Dove
                                                                                                                    • Figure 75: Dove VisibleCare Body Wash ad
                                                                                                                • U.S. Black Population

                                                                                                                  • Key points
                                                                                                                    • U.S. population by race/Hispanic origin
                                                                                                                      • Figure 76: Population, by race/Hispanic origin, 2008-18
                                                                                                                      • Figure 77: Population, by race/Hispanic origin, 1970-2020
                                                                                                                      • Figure 78: Asian, Black, and Hispanic populations, 1970-2020
                                                                                                                    • Age
                                                                                                                      • Generations by race
                                                                                                                        • Figure 79: U.S. population by race, and by generation, 2011
                                                                                                                      • Black population by age
                                                                                                                        • Figure 80: U.S. Black population, by age, 2008-18
                                                                                                                        • Figure 81: U.S. population, by age, 2008-18
                                                                                                                      • U.S. Black geographic concentration
                                                                                                                        • Figure 82: Black geographic concentration, by region, 2007
                                                                                                                      • Black population by state
                                                                                                                        • Figure 83: States with largest Black population, 2011
                                                                                                                        • Figure 84: States with largest Black population, by distribution, 2008
                                                                                                                      • Population by geographic concentration
                                                                                                                        • Figure 85: States (including District of Columbia) ranked with the highest share of Black residents, 2011
                                                                                                                      • Black metros
                                                                                                                        • Figure 86: Metropolitan status of Black households, 2006 and 2011
                                                                                                                        • Figure 87: States ranked by change in black population, 2000-10
                                                                                                                        • Figure 88: Top 10 metropolitan areas with the largest number of Black residents, 2010
                                                                                                                      • Black households
                                                                                                                        • Figure 89: Average household size, by race/Hispanic origin/race of householder, 2001 and 2011
                                                                                                                        • Figure 90: Presence and ages of children in the household, by race/Hispanic origin, 2011
                                                                                                                        • Figure 91: Marital status, by race and Hispanic origin, 2011
                                                                                                                    • Appendix – Other Useful Information

                                                                                                                        • Figure 92: Likelihood of making a medium-level purchase in the next 30 days, by race/Hispanic origin, April 2011-June 2012
                                                                                                                        • Figure 93: Distribution of average expenditures of the apparel category, by race of reference person, 2011
                                                                                                                        • Figure 94: Changes in household spending, spending more, by age, October 2012
                                                                                                                        • Figure 95: Changes in household spending, spending less, by age, October 2012
                                                                                                                        • Figure 96: Changes in household spending, spending the same, by age, October 2012
                                                                                                                        • Figure 97: Changes in household spending, by education, October 2012
                                                                                                                        • Figure 98: Changes in household spending on utilities, by household income, October 2012
                                                                                                                        • Figure 99: Changes in household spending on childcare, by household income, October 2012
                                                                                                                        • Figure 100: Average annual expenditures on food and beverage, by Black and other races, 2008-11
                                                                                                                    • Appendix – Trade Associations

                                                                                                                      Companies Covered

                                                                                                                      • Chrysler LLC
                                                                                                                      • Facebook, Inc.
                                                                                                                      • John Frieda
                                                                                                                      • McDonald's U.S.A.
                                                                                                                      • Nike

                                                                                                                      Black Consumers' Share of Wallet - US - January 2013

                                                                                                                      £3,277.28 (Excl.Tax)