TORONTO (Reuters) - Workers are spending incentive bonuses on clothes, groceries and essentials during tough economic times rather than splashing out on vacations or other luxury gifts, according to a study released on Tuesday.
The study by Bank of Nova Scotia and Berkeley Payment Solutions looked at how recipients of Visa prepaid incentive cards used the cards in North America in the first quarter of 2009 and compared that with a year earlier.
The study found that people doubled their spending at fast-food restaurants in the latest quarter, while spending at home furnishing and equipment stores dropped by almost half.
Spending at family clothing stores went up 79 percent, discount stores spending was up 37 percent and grocery stores up 20 percent. Department stores spending fell 35 percent.
“The logic is that people use their incentive money for necessities during a downturn versus buying themselves things that were perceived as luxury goods,” said David Eason, president of Berkeley Payment Solutions, which supplies prepaid incentive cards.
Reporting by Nina Lex; editing by Janet Guttsman