August must be over: A flood of reports, surveys, papers and polls arrived this week

Everyone is back to work, clearly. Herewith: A summary of the data published this week.

Surveying the surveys, some basic consumer behaviour around consumer behaviour becomes clear.

A new survey from President's Choice Financial finds that, when it comes to buying insurance, Mom and Dad are the first call for Canadians seeking advice. The poll found that more than half of respondents seek advice from family, friends or coworkers when researching insurance options. Only 35 per cent will do their own research.  Young Canadians are especially dependent on family when making insurance decisions, with 59 per cent of respondents between the ages of 18 and 34 indicating that they would turn to their parents for advice.

A TD Survey finds most Gen Xers build-in “budget flexibility in when it comes to personal finance so that they can afford other things in life. So-called Gen X Canadians overwhelmingly consider themselves "House-Plus" buyers, that is, someone who buys a smaller house so that they have money left over after the mortgage payment to do things like travel. Only one in seven (14%) Gen X Canadians consider themselves "House-All" buyers, that is, people who buy the biggest house then can and put all their money toward the mortgage, leaving less room for discretionary spending.

A whole slew of studies and reports on the financial state of the North American consumer are not so encouraging for the state of spending power through the year ahead.  

One survey found that consumer spending in the U.S. unexpectedly dropped in July for the first time in six months, a sign households are lagging behind as wages fail to accelerate. None of the 79 economists in a Bloomberg survey projected a decrease in this measure. Incomes climbed 0.2 percent, the smallest monthly advance this year. Consumer spending, which accounts for about 70 percent of the economy, has been held back “by tight credit and meager wage growth that is barely able to keep up with inflation.”

Another survey finds car buyers are falling behind when it comes to payments on their auto loans. The auto loan delinquency rate -- borrowers who are at least 60 days behind on their loans -- rose to 0.95% in the second quarter, up more than 9% from 0.87% the same quarter a year ago.

A National Payroll Week Research Survey conducted by the Canadian Payroll Association (CPA) suggests the financial picture for working Canadians across the country is weakening. According to the study more Canadians than ever are living pay cheque-to-pay cheque. Not only that, but they're saving less and falling further behind in meeting their retirement goals. Half of employees (51%) report that it would be difficult to meet their financial obligations if their pay cheque was delayed by a single week. This is up from an average of 49% over the past three years. This is not good. Nationally, 26% of study respondents said they "probably could not" pull together $2,000 over the next month if an emergency expense arose.

Another recent survey finds Canadians are retiring at a later age as a way of accumulating more retirement savings. Fully 79% of Canadian employees and 82% of Ontario employees expect to delay retirement until age 60 or older -- up from 70% and 66% respectively over the past three years. The number one reason cited for retiring later in life is that employees are not able to save enough money.
Another survey finds that wealth in Canada is concentrated heavily in the top 10% - with the bottom 50% combined accounting for less than 6% of all wealth. According to the study from the Broadbent Institute, "Contrary to rosy reports of rising net worth and a post-recession recovery, these new numbers sound the alarm on Canada’s wealth inequality problem." Key findings:
  • The top 10% of Canadians accounted for almost half (47.9%) of all wealth in 2012.
  • The bottom 30% of Canadians accounted for less than 1% of all wealth.
  • The top 10% held almost $6 in every $10 (59.6%) of financial assets excluding pensions - more than the bottom 90% combined.
The world is, apparently, facing a global job crisis. According to the World Bank the global economy needs to create an extra 600 million jobs worldwide by 2030 just to cope with the expanding population.

So how about some good news? Investors who were smart enough to play the “weak consumer” theme and invested in that fine purveyor of discounted household goods, the Dollarama chain of stores, are doing well. It is testament to the current state of the economy that Dollarama has been one of the stars on the TSX since the Great Recession. The company's stock has done well, the most recent earnings announcement suggests business will continue to boon. The company’s second quarter earnings report boasts an increase in sales, net earnings and per share earnings in Q2, 2014.

The highlights (compared to Q2 2013):
  • Sales increased by 12.0 % to $572.6 million
  • Comparable store sales (2) grew 4.2%, over and above 6.2% the previous year
  • EBITDA (1) grew 13.5% to $108.6 million
  • Operating income grew 17.5% to $99.2 million
  • Diluted net earnings per common share increased by 25.6%, from $0.82 to $1.03
  • In addition, 18 net new stores were opened
“With the opening of 43 net new stores so far in Fiscal 2015, we are on target to expand our store network across Canada by 70 to 80 net new stores this year," stated Larry Rossy, CEO and chairman of Dollarama.