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Welcome to the ShopperScape™
Newsletter January 2009
Shoppers’ short-term spending intentions continue to slip in the aftermath of an unfruitful holiday season from most retailers’ perspectives (Figure 1).
- The good news is the percentage of households planning to spend less in the coming month—54%—held steady from last month.
- The bad news is only 5% of shoppers intend to spend more in the coming month compared with last year.
Figure
1
Intentions to Spend More, the Same or Less at Retail Stores during the
Next Month Compared with Last Year: 2008
Source: TNS Retail Forward ShopperScape™, 2008
Shoppers continue to watch their major assets—worth of household members’ investments and home values—shrink (Figure 2). Worth of household members’ investments shows the steepest decline from last spring with more than half (55%) of shoppers sustaining losses.
- For retailers, perhaps the most disconcerting area of household financial health is perceptions of job security. Since March, the percentage of shoppers viewing the job security of employed household members as better off than last year at this time has shrunk from 23% to 12%.
- On a positive note, shoppers’ income, as well as debt, levels seem to be stabilizing.
The upshot of these observations is a conservative outlook for spending beyond basics. As long as shoppers feel insecure about employment, their short-term spending plans are likely to remain modest and focus on necessities such as food, fuel and housing. Devalued nests and nest eggs shrink shoppers’ safety nets and reduce incentive to invest much in areas such as home improvement or décor.
Figure
2
How Shoppers Perceive Household Financial Health Compared with Last Year
|
March |
April |
October |
November |
December* |
| |
|
|
|
Job security of employed
household members |
|
|
|
Much/Somewhat Better Off |
23% |
16% |
17% |
16% |
12% |
No Change from Last Year |
60% |
63% |
60% |
61% |
64% |
Somewhat/Much Worse Off |
17% |
21% |
23% |
23% |
23% |
| |
|
|
|
|
|
Household income level |
|
|
|
|
|
Much/Somewhat Better Off |
38% |
30% |
28% |
27% |
27% |
No Change from Last Year |
38% |
43% |
42% |
43% |
45% |
Somewhat/Much Worse Off |
24% |
27% |
30% |
30% |
28% |
| |
|
|
|
|
|
Credit card debt level |
|
|
|
|
|
Much/Somewhat Better Off |
29% |
23% |
23% |
23% |
21% |
No Change from Last Year |
50% |
52% |
51% |
52% |
56% |
Somewhat/Much Worse Off |
21% |
25% |
26% |
25% |
23% |
| |
|
|
|
|
Monthly mortgage and
car payments |
|
|
|
|
Much/Somewhat Better Off |
22% |
15% |
17% |
16% |
16% |
No Change from Last Year |
63% |
67% |
65% |
69% |
71% |
Somewhat/Much Worse Off |
15% |
18% |
18% |
15% |
12% |
| |
|
|
|
Worth of household members'
investments |
|
|
|
Much/Somewhat Better Off |
25% |
16% |
10% |
9% |
7% |
No Change from Last Year |
49% |
45% |
38% |
38% |
38% |
Somewhat/Much Worse Off |
26% |
39% |
52% |
53% |
55% |
| |
|
|
|
|
|
Value of my home |
|
|
|
|
|
Much/Somewhat Better Off |
29% |
20% |
17% |
14% |
13% |
No Change from Last Year |
49% |
48% |
49% |
50% |
48% |
Somewhat/Much Worse Off |
22% |
32% |
34% |
36% |
39% |
*Note: December data is unweighted topline data.
Source: TNS Retail Forward ShopperScape™, March, April, October, November and December 2008
| HOPE ON THE WAY OR ON THE WANE? |
 Shoppers have low levels of confidence in the incoming administration’s ability to ease the economic crisis (Figure 3). Up Market shoppers are a little more upbeat than others about improvements related to economic factors that affect their personal financial situations: job security, income levels and stock market performance. Down Market shoppers are more likely not to have formed an opinion yet.
- Of all listed economic factors, the largest percentage (30%) of shoppers believes the Obama administration will have a positive effect on the overall health of the U.S. economy. But, half (51%) are not confident improvements will occur in this area.
- The most optimistic views relate to personal job security. Although only a little more than one-quarter (27%) of shoppers express confidence in job security improvements once the new administration takes office, fewer than one-third (31%) express a lack of confidence.
- That being said, shoppers are much more pessimistic about the incoming administration’s ability to affect the national unemployment rate. More than half (53%) are not confident that the national unemployment rate will improve after Obama and his team take office. Up Market shoppers are least optimistic.
- The area where shoppers are least confident about post-Bush improvement is cost of living. All income segments are equally pessimistic about cost of living. With food inflation remaining at about 6% despite easing fuel costs, shoppers likely doubt that “everything that goes up must come down.”
Figure
3
How confident are you that the following factors will improve
once the new administration takes office?
|
All Primary Shoppers |
Down Market (<$22.5k) |
Middle Market ($22.5k-$84.9k) |
Up
Market (>$85k) |
| |
|
|
|
|
Overall health of the U.S. economy |
|
|
|
|
Very/somewhat confident |
30% |
26% |
30% |
32% |
No opinion |
19% |
27% |
19% |
15% |
Not very/not at all confident |
51% |
47% |
51% |
53% |
| |
|
|
|
Job security of employed members of my household |
|
|
|
Very/somewhat confident |
27% |
20% |
25% |
34% |
No opinion |
42% |
47% |
44% |
38% |
Not very/not at all confident |
31% |
33% |
31% |
28% |
| |
|
|
|
|
Household income level |
|
|
|
|
Very/somewhat confident |
26% |
22% |
24% |
31% |
No opinion |
35% |
36% |
36% |
34% |
Not very/not at all confident |
39% |
42% |
40% |
35% |
| |
|
|
|
|
National unemployment rate |
|
|
|
|
Very/somewhat confident |
25% |
23% |
25% |
25% |
No opinion |
22% |
27% |
22% |
19% |
Not very/not at all confident |
53% |
50% |
53% |
56% |
| |
|
|
|
|
National mortgage crisis |
|
|
|
|
Very/somewhat confident |
25% |
20% |
24% |
27% |
No opinion |
24% |
34% |
24% |
20% |
Not very/not at all confident |
51% |
46% |
52% |
53% |
| |
|
|
|
|
Stock market performance |
|
|
|
|
Very/somewhat confident |
25% |
20% |
24% |
29% |
No opinion |
25% |
35% |
26% |
19% |
Not very/not at all confident |
50% |
45% |
50% |
52% |
| |
|
|
|
|
Value of my home |
|
|
|
|
Very/somewhat confident |
22% |
17% |
21% |
26% |
No opinion |
37% |
49% |
38% |
30% |
Not very/not at all confident |
41% |
34% |
41% |
44% |
| |
|
|
|
|
Cost of living |
|
|
|
|
Very/somewhat confident |
22% |
22% |
21% |
23% |
No opinion |
23% |
25% |
24% |
20% |
Not very/not at all confident |
55% |
53% |
55% |
57% |
Note: Unweighted topline data.
Note: Highlighting/bolding indicates a percentage that is significantly higher than all primary shoppers.
Source: TNS Retail Forward ShopperScape™, December 2008
ShopperScape™ members will receive more a more detailed analysis of holiday shopping, including sections on gift card and online purchasing. ShopperScape™ members also can request assistance in custom analyses of this information by contacting Rachel.McGuire@tns-global.com or Mandy.Putnam@tns-global.com.
Industry Outlook: Drug Channel
Drug stores have not escaped the retail growth slowdown brought on by the current economic conditions. Growth in demand for prescription drugs is at its lowest level in years. Meanwhile, competition from alternative players, e.g., supercenters, supermarkets and warehouse clubs, is as intense as ever. Drug stores will see some recovery once the economy bounces back, but several factors will make future growth challenging. Players that deliver unique services and solutions in an effort to fully commit to be customers’ health care partner will achieve the most success.
—Jennifer Halterman
jhalterman@retailforward.com
Detailed retail channel and category sales forecasts are available to members of the Food Drug Mass, Homegoods and Softgoods programs of the Retail Forward Intelligence System™ (RFIS) at www.retailforward.com. For more information about RFIS, please contact Katherine R. Clarke at kclarke@retailforward.com or 614-355-4009. |
What's
TNS Retail Forward ShopperScape™?
TNS Retail Forward ShopperScape™ focuses on today’s consumers and their shopping behaviors. TNS Retail Forward ShopperScape™ has been fielded since November 2003 to a sample of 4,000 consumers each month. The survey gathers timely, up-to-date information about where consumers shop and what they buy. TNS Retail Forward ShopperScape™ is administered through TNS’s online household panel, weighted based to be representative of U.S. households. For more information, call Kathy Clarke at
614-355-4009 or visit http://www.retailforward.com/retailintel/ss_default.asp. |
| 