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Share of Wallet: Blacks - US - February 2010

A variety of measures indicate that the economy did not significantly improve in 2009, as many had hoped. Unemployment rose steadily throughout the first three quarters of 2009 and reached a 28-year high of 10% as of December 2009 with more than 15% unemployment among Black Americans. Consumer confidence remained at historically low levels throughout 2009, although many believe that with the new decade, things are beginning to come around. These factors and others are driving changes in African-American purchasing behavior. Most have become much more frugal, which creates a challenging environment for manufacturers and retailers from a variety of sectors.

Given the fact that many companies are finding it harder than ever to turn a profit, it is especially important to carefully examine African-American cultural influencers and purchasing behavior in order to maximize product development and marketing efforts while identifying areas of potential growth.

This report addresses the following questions:

  • Following the economic downturn, how did Black purchasing behavior in 2009 compare with 2008 and previous years?
  • What are the categories in which Black consumers over- or under-spend in comparison to non-Blacks?
  • How has the recession impacted African-American lifestyles in 2009?
  • Were African-Americans more optimistic and willing to spend in 2009, compared with 2008?
  • What channels tend to perform relatively well during recession?
  • How have consumption and shopping habits changed during the recession?

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Sources
          • Consumer survey data
            • Consumer Expenditure Survey
              • Abbreviations and terms
                • Abbreviations
                  • Generations
                  • Executive Summary

                      • Black purchasing power
                        • The recession and Black expenditures
                          • Medical expenses
                            • Personal care products and services
                              • Savings
                                • Spending
                                  • Transportation
                                    • Food and beverage
                                      • Apparel and footwear
                                      • Insights and Opportunities

                                          • Is share of wallet an indicator of loyalty?
                                            • Demand is perishable
                                              • New shopping channels including online
                                                • Black Aspirationals
                                                  • More home cooking
                                                    • Layaway a “born-again” option
                                                      • Other growth segments and product categories
                                                        • Home décor and furnishings
                                                          • Lower income shoppers
                                                            • Concentrated retail demand
                                                            • Inspire Insights

                                                                • Trend: Reviewing and Re-evaluating
                                                                  • What’s it about?
                                                                    • What we’ve seen
                                                                      • Specifics
                                                                        • Implications
                                                                          • Trend: Life After Debt
                                                                            • What’s it about?
                                                                              • What we've seen
                                                                                • Specifics
                                                                                  • Implications
                                                                                  • Black Purchasing Power

                                                                                    • Key points
                                                                                      • Household income distribution
                                                                                        • Figure 1: Median household income, by race and Hispanic origin of householder, 2008
                                                                                      • Black income
                                                                                        • Figure 2: Household income distribution for all households and Black households, 2008
                                                                                      • Income of Black households versus total U.S. households
                                                                                        • Figure 3: Increase in percentage of Black households with incomes of $50K or more versus total U.S. households, 2003 and 2007
                                                                                      • Black purchasing power
                                                                                        • Figure 4: Purchasing power, by race/Hispanic origin, 2008
                                                                                        • Figure 5: Top 10 states with the largest share of Black buying power, 2008
                                                                                        • Figure 6: Top 10 states, by rate of growth of Black buying power, 1990-2008
                                                                                      • Black households
                                                                                        • Figure 7: Average household size, by Hispanic origin/race of householder, 2001 and 2008
                                                                                        • Figure 8: Black households and all households, by size, 2009
                                                                                        • Figure 9: Black households and all households, by presence and ages of children, 2009
                                                                                      • Black household earners
                                                                                        • Household income distribution by race
                                                                                          • Figure 10: Household income distribution, by race and Hispanic origin of householder, 2008
                                                                                        • Household earners by income
                                                                                          • Figure 11: Number of household earners, by household income, November 2009
                                                                                        • Household earners by age
                                                                                          • Figure 12: Number of household earners, by age, November 2009
                                                                                        • Income changes in the household
                                                                                          • Those earning less have seen a decline in household income
                                                                                            • Figure 13: Changes in household income, by household income, November 2009
                                                                                          • College educated Blacks are less likely to see their income decrease
                                                                                            • Figure 14: Changes in household income, by educational attainment, November 2009
                                                                                          • Spending and savings habits
                                                                                            • Men are less likely to change spending habits
                                                                                              • Figure 15: Changes in spending habits, by gender, November 2009
                                                                                            • High income earners are also spending less in this economy
                                                                                              • Figure 16: Changes in spending habits, by household income, 2009
                                                                                            • Regardless of gender, saving is not a priority
                                                                                              • Figure 17: Changes in saving habits, by gender, November 2009
                                                                                            • The Black middle class is saving less than a year ago
                                                                                              • Figure 18: Changes in saving habits, by household income, November 2009
                                                                                            • Men seem to be better savers
                                                                                              • Figure 19: Monthly saving habits, by gender, November 2009
                                                                                            • Amount saved is reflective of income level
                                                                                              • Figure 20: Monthly saving habits, by household income, November 2009
                                                                                            • Households with children save more than those without children
                                                                                              • Figure 21: Monthly saving habits, by number of children in the household, November 2009
                                                                                          • Category Expenditures

                                                                                            • Key points
                                                                                              • Category expenditures
                                                                                                  • Figure 22: Average annual expenditures, Black CUs, by expenditure category, 2002-10
                                                                                                  • Figure 23: Average annual expenditures, non-Black CUs, by expenditure category, 2002-10
                                                                                                • Distribution of expenditures
                                                                                                  • Figure 24: Average annual expenditures of Black and non-Black CUs, indexed to all CUs, 2008
                                                                                                  • Figure 25: Average annual distribution of expenditures, by categories, by Black and non-Black CUs, 2008
                                                                                                • Household expenses
                                                                                                  • Younger Blacks are learning to save
                                                                                                    • Figure 26: Attitudes towards monthly expenses, by age, November 2009
                                                                                                  • Monthly household expenses—lack of perspective or overextended financially
                                                                                                    • Figure 27: Attitudes towards monthly expenses, by household income, November 2009
                                                                                                  • Changes in household spending
                                                                                                    • Those aged 35-44 are the least likely to reduce expenditures in discretionary categories
                                                                                                      • Figure 28: Changes in household spending, by age, November 2009
                                                                                                    • Household expenses
                                                                                                      • Top three household expenses, lifestage is a factor
                                                                                                        • Figure 29: Top three household expenses, by age, by highest expense, 2009
                                                                                                      • Household income has little impact on household expenses
                                                                                                        • Figure 30: Top three household expenses, by household income, 2009
                                                                                                      • Shopping
                                                                                                        • Frequently purchased items
                                                                                                          • Figure 31: Frequently purchased items, by age, November 2009
                                                                                                        • Frequently purchased items by income
                                                                                                          • Figure 32: Frequently purchased items, by household income, November 2009
                                                                                                        • Seldom-purchased items vary by age
                                                                                                          • Figure 33: Infrequently purchased items, by age, November 2009
                                                                                                        • Low income respondents tend to purchase technology more frequently
                                                                                                          • Figure 34: Infrequently purchased items, by household income, November 2009
                                                                                                        • Shopping outlets for food items
                                                                                                            • Figure 35: Preferred shopping outlets for food items, by household income, November 2009
                                                                                                          • Shopping outlets for non-food items
                                                                                                            • Figure 36: Preferred shopping outlets for non-food items, by household income, November 2009
                                                                                                        • Larger Expenditure Increases

                                                                                                          • Key points
                                                                                                            • Expenditures 2003 versus 2008
                                                                                                              • Figure 37: Distribution of expenditures, Black versus total U.S., 2003 and 2008
                                                                                                            • Personal insurance/pensions
                                                                                                              • Figure 38: Distribution of average annual personal insurance and pensions expenditures, by Black and other races, 2008
                                                                                                              • Figure 39: Average annual Black expenditures on personal insurance and pensions, 2002-10
                                                                                                            • Healthcare
                                                                                                              • Figure 40: Distribution of average annual healthcare expenditures, by Black and other races, 2008
                                                                                                            • Changes in healthcare expenditures
                                                                                                              • Figure 41: Average annual Black household expenditures on healthcare, 2002-10
                                                                                                              • Figure 42: Changes in household spending for medical expenses, by household income, November 2009
                                                                                                            • Medical insurance
                                                                                                              • Figure 43: Ownership of health insurance, by race/Hispanic origin, April 2008-June 2009
                                                                                                            • Health insurance by household income
                                                                                                              • Figure 44: Black ownership of health insurance, by household income, April 2008-June 2009
                                                                                                            • Education
                                                                                                              • Education expenditures
                                                                                                                • Figure 45: Distribution of average annual expenditures education across categories, by Black and other races, 2008
                                                                                                              • Education expenditure increases
                                                                                                                • Figure 46: Average annual Black expenditures on education, 2002-10
                                                                                                              • Education expenditures are affected by household income
                                                                                                                • Figure 47: Changes in household spending for education, by household income, November 2009
                                                                                                              • Education expenditures decrease the most by those with more than two children
                                                                                                                • Figure 48: Changes in household spending for education, by number of children in the home, November 2009
                                                                                                              • Housing
                                                                                                                • Average annual housing expenditures
                                                                                                                  • Figure 49: Distribution of average annual shelter expenditures, by Black and other races, 2008
                                                                                                                • Changes in housing expenditures
                                                                                                                  • Figure 50: Average annual Black expenditures on housing, 2002-10
                                                                                                                • Those with lower household income are spending more on housing
                                                                                                                  • Figure 51: Changes in household spending on mortgage or rent, by household income, November 2009
                                                                                                                • Increases in housing expenditure affect even the most educated Blacks
                                                                                                                  • Figure 52: Changes in household spending on mortgage or rent, by education level, November 2009
                                                                                                              • Smaller Expenditure Increases

                                                                                                                • Key points
                                                                                                                  • Food and beverages
                                                                                                                    • Food and beverage expenditures
                                                                                                                      • Figure 53: Average annual expenditures on food and beverages, by Black and non-Black CUs, 2002-10
                                                                                                                    • Black adults under-index on alcoholic beverage expenditure
                                                                                                                      • Figure 54: Average annual expenditures of food and beverage, by Black and other reaces, indexed to all CUs, 2008
                                                                                                                      • Figure 55: Average annual distribution of food and beverage expenditures, by Black and other races, 2008
                                                                                                                    • Lower income Blacks spend more on groceries
                                                                                                                      • Figure 56: Changes in household spending on groceries, by household income, November 2009
                                                                                                                    • Decision-maker by gender
                                                                                                                      • Figure 57: Major influencer in regular purchasing decisions, by gender, November 2009
                                                                                                                    • Food away from home
                                                                                                                      • Weekday dinner purchases
                                                                                                                        • Figure 58: Weekday dinner purchased in past 30 days, by type of establishment and household income, November 2009
                                                                                                                      • Weekend dinner purchases
                                                                                                                        • Figure 59: Weekend dinner purchased in past 30 days, by type of establishment and household income, November 2009
                                                                                                                      • Apparel
                                                                                                                        • Average annual expenditure
                                                                                                                          • Figure 60: Average annual expenditures on apparel, by Black and other races, 2008
                                                                                                                        • Changes in clothing and footwear expenditures
                                                                                                                          • Figure 61: Average annual Black expenditures on Apparel and services, 2002-10
                                                                                                                        • Regardless of household income, clothing and footwear expenditure is down
                                                                                                                          • Figure 62: Changes in household spending on clothing and footwear, by household income, November 2009
                                                                                                                        • Apparel purchasing frequency
                                                                                                                          • Figure 63: Frequency of Black household spending on clothing and footwear, by household income, November 2009
                                                                                                                        • Apparel purchasing frequency is not always impacted by children in the home
                                                                                                                          • Figure 64: Purchase frequency of clothing and footwear, by number of children in the home, November 2009
                                                                                                                        • Personal care
                                                                                                                          • Personal care expenditures
                                                                                                                            • Figure 65: Average annual expenditures on personal care products and services, Black CUs, 2002-10
                                                                                                                            • Figure 66: Distribution of average annual personal care expenditures, by Black and other races, 2008
                                                                                                                          • Personal care product expenditures
                                                                                                                            • Figure 67: Changes in household spending on personal care products, by household income, November 2009
                                                                                                                          • Black women are cutting back on personal care expenditures
                                                                                                                            • Figure 68: Changes in household spending on personal care products, by gender, November 2009
                                                                                                                          • Personal care services
                                                                                                                            • Figure 69: Changes in household spending on personal care services, by household income, November 2009
                                                                                                                          • Black women are cutting back significantly on personal care services
                                                                                                                            • Figure 70: Changes in household spending on personal care services, by gender, November 2009
                                                                                                                        • Cluster Analysis

                                                                                                                            • Infrequent shoppers and diners (ISD)
                                                                                                                              • Declining income, food-discounters (DIFD)
                                                                                                                                • Frequent diners, constant spenders (FDCS)
                                                                                                                                  • Cluster characteristics
                                                                                                                                    • Figure 71: Sample size, Black share of wallet clusters, November 2009
                                                                                                                                    • Figure 72: Preferred shopping outlets for food and non-food items, by Black share of wallet clusters, November 2009
                                                                                                                                    • Figure 73: Weekend and weekday dinner purchases, by Black share of wallet clusters, November 2009
                                                                                                                                    • Figure 74: Distribution of expenditures (larger share of wallet), by Black share of wallet clusters, November 2009
                                                                                                                                    • Figure 75: Distribution of expenditures (smaller share of wallet), by Black share of wallet clusters, November 2009
                                                                                                                                    • Figure 76: Banking products owned, by Black share of wallet clusters, November 2009
                                                                                                                                    • Figure 77: Attitudes towards spending and saving, by Black share of wallet clusters, November 2009
                                                                                                                                    • Figure 78: Changes in household spending, by Black share of wallet clusters, November 2009
                                                                                                                                    • Figure 79: Changes in spending due to economy, by Black share of wallet clusters, November 2009
                                                                                                                                    • Figure 80: Changes in savings habits, by Black share of wallet clusters, November 2009
                                                                                                                                    • Figure 81: Changes in household size, by Black share of wallet clusters, November 2009
                                                                                                                                  • Demographic tables
                                                                                                                                    • Figure 82: Black share of wallet clusters, by gender, November 2009
                                                                                                                                    • Figure 83: Black share of wallet clusters, by age, November 2009
                                                                                                                                    • Figure 84: Black share of wallet clusters, by household income, November 2009
                                                                                                                                    • Figure 85: Black share of wallet clusters, by education groups, November 2009
                                                                                                                                    • Figure 86: Black share of wallet clusters, by number of people in household who are working, November 2009
                                                                                                                                  • Cluster methodology
                                                                                                                                  • U.S. Black Population

                                                                                                                                    • Key points
                                                                                                                                      • U.S. population by race/Hispanic origin
                                                                                                                                        • Figure 87: Population, by race and Hispanic origin, 2004-14
                                                                                                                                        • Figure 88: Population, by race/Hispanic origin, 1970-2020
                                                                                                                                        • Figure 89: Asian, Black, and Hispanic populations, 1970-2020
                                                                                                                                      • U.S. Black population
                                                                                                                                        • Black population by age
                                                                                                                                          • Figure 90: U.S. Black population, by age, 2004-14
                                                                                                                                        • U.S. Black geographic concentration
                                                                                                                                          • Figure 91: Black geographic concentration, by region, 2007
                                                                                                                                        • Black population by state
                                                                                                                                          • Figure 92: States with largest black population, 2008
                                                                                                                                          • Figure 93: States with the highest share of black residents, 2008
                                                                                                                                        • Black metros
                                                                                                                                          • Figure 94: Metropolitan status of black households, 2001 and 2007
                                                                                                                                          • Figure 95: Top 10 metropolitan areas with the largest number of Black residents, 2006-08
                                                                                                                                        • Average household size
                                                                                                                                          • Figure 96: Average household size, by Hispanic origin/race of householder, 2001 and 2008
                                                                                                                                          • Figure 97: Households with children, by race and Hispanic origin of householder, 2007
                                                                                                                                      • Appendix: Additional Consumer Expenditure Tables

                                                                                                                                          • Black and non-Black households
                                                                                                                                            • Figure 98: Average annual expenditures, Black and other race households, by expenditure category, 2008
                                                                                                                                            • Figure 99: Changes in household spending, by household income, November 2009
                                                                                                                                          • Household expenses
                                                                                                                                            • Top three household expenses by age
                                                                                                                                              • Figure 100: Top three household expenses, by age, by highest expense, 2009
                                                                                                                                            • Household expenses by income
                                                                                                                                              • Figure 101: Top three household expenses, by household income, 2009
                                                                                                                                            • Insurances
                                                                                                                                              • Figure 102: Average annual expenditures on personal insurance, by Black and other races, 2008
                                                                                                                                            • Healthcare
                                                                                                                                              • Figure 103: Average annual expenditures on healthcare, by Black and other races, 2008
                                                                                                                                            • Education
                                                                                                                                              • Figure 104: Changes in household spending for education, by age, November 2009
                                                                                                                                              • Figure 105: Average annual expenditures on education, by Black and other races, 2008
                                                                                                                                            • At home
                                                                                                                                              • Figure 106: Changes in household spending on mortgage or rent, by age, November 2009
                                                                                                                                              • Figure 107: Changes in household spending on groceries, by age, November 2009
                                                                                                                                              • Figure 108: Average annual expenditures on shelter, by Black and other races, 2008
                                                                                                                                              • Figure 109: Average annual expenditures on food and beverage, by Black and other races, 2008
                                                                                                                                            • Apparel and footwear
                                                                                                                                              • Figure 110: Changes in household spending on clothing and footwear, by age, November 2009
                                                                                                                                              • Figure 111: Average annual apparel expenditures indexed to all CUs, by Black and other races, 2008
                                                                                                                                            • Personal care expenditures
                                                                                                                                              • Figure 112: Average annual expenditures on personal care products and services, by Black and other races, 2008
                                                                                                                                              • Figure 113: Average annual personal care products and services expenditures indexed to all CUs, by Black and other races, 2008
                                                                                                                                            • Entertainment
                                                                                                                                              • Figure 114: Average annual expenditures in entertainmet, by Black and other races, 2008
                                                                                                                                              • Figure 115: Distribution of average annual entertainment expenditures, by Black and other races, 2008
                                                                                                                                            • Home furnishings
                                                                                                                                              • Figure 116: Average annual expenditures on household furnishings and equipment, by Black and other races, 2008
                                                                                                                                              • Figure 117: Average annual household furnishings and equipment expenditures indexed, by Black and other races, 2008
                                                                                                                                            • Telecommunications
                                                                                                                                              • Figure 118: Average annual expenditures on telephone services, by Black and other races, 2008
                                                                                                                                              • Figure 119: Average annual telephone services expenditures indexed, by Black and other races, 2008
                                                                                                                                          • Appendix: Trade Associations

                                                                                                                                            Companies Covered

                                                                                                                                            • Citigroup Inc.
                                                                                                                                            • Dunkin' Brands
                                                                                                                                            • Facebook, Inc.
                                                                                                                                            • Federal Deposit Insurance Corporation
                                                                                                                                            • Krispy Kreme Doughnuts Inc.
                                                                                                                                            • Starbucks Corporation
                                                                                                                                            • The Boston Consulting Group Inc.
                                                                                                                                            • U.S. Bureau of Labor Statistics
                                                                                                                                            • Walgreen Co
                                                                                                                                            • Walmart Stores (USA)

                                                                                                                                            Share of Wallet: Blacks - US - February 2010

                                                                                                                                            £3,199.84 (Excl.Tax)