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Welcome to the ShopperScape™ Newsletter February 2008

• Expect shoppers to trade down as they wait for the economy to improve, which will benefit discounters such as Wal-Mart.
• Be grateful for the impact of gift cards on January and February sales reports.
• Anticipate the gender gap widening regarding Valentine’s Day gift giving with men opening their wallets—if not their hearts—wider than women.
• Look for Valentine’s Day spending—especially spending by women—to be conservative this year compared with last year.
• Anticipate more retailers turning green as reducing wasteful packaging and supporting recycling become more relevant to shoppers in determining what stores they shop.

Despite economic woes, the percentages of shoppers visiting leading retailers during the past four weeks remain mostly comparable with last year (Figure 1).

• Wal-Mart and Target greeted 3 and 2 percentage points more customers respectively than last year.  Wal-Mart, in particular, is reaping rewards at others’ expense as cautious shoppers migrate to value-oriented retailers.
• Kohl’s enjoyed 3 percentage point growth in shopper share year-to-year (Y-T-Y) while the other large department store chains only gained 1 percentage point in shopper share Y-T-Y.
• Reflective partly of the weak housing market and related buying, homegoods retailers—especially Bed Bath & Beyond—were challenged to simply hold onto shopper shares Y-T-Y.
  

Figure 1

Percentage of Primary Shoppers Shopping Retailers in the Past 4 Weeks

	Jan-07	Jan-08	Percentage Point Difference
Wal-Mart/Wal-Mart Supercenter	68%	71%	+3
Target/SuperTarget	45%	47%	+2
Best Buy	30%	31%	+1
Circuit City	16%	16%	0
Macy's	23%	24%	+1
JCPenney	30%	31%	+1
Kohl's	24%	27%	+3
Sears	19%	20%	+1
Lowe's	26%	26%	0
The Home Depot	30%	32%	+1
Bed Bath & Beyond	21%	19%	-2
Linens 'n Things	11%	11%	0


Source: TNS Retail Forward ShopperScape™

The Gift That Keeps On Giving

Holiday gift card giving extended beyond Christmas this year to bring the total percentage of households receiving gift cards and the total amount received to slightly above last year’s numbers (Figure 2).

• January’s ShopperScape™ survey shows that 61% of households received gift cards during the holidays, up from December’s report of 56% of households.
• The average total value received rang in at $139, comparable to last year’s $136.
• As previously reported, Up Market households fared best in the gift card department.

Figure 2

Holiday Gift Cards Received

* Among shoppers receiving holiday gifts cards. Average dollar amount shown.
Source: TNS Retail Forward ShopperScape™

No doubt gift cards boosted January sales with half of the value redeemed before the end of the month (Figure 3).

• Gift cards also will support February sales since shoppers predict they will have spent two-thirds of the value of their gift cards by Valentine’s Day.
• Although more Down Market households redeemed gift cards early—soon after Christmas Day—those in the Middle and Up Markets expect to catch up to the percentage redeemed by the Down Market by mid-month, and they have a bit more to spend in terms of value.

Figure 3

Percentages of Gift Card Values Redeemed

	All Shoppers	Down Market (< $22,500)	Middle Market ($22,500 to $84,999)	Up Market ($85,000+)
Percentage Redeemed So Far	50%	61%	49%	45%
Percentage Will Redeem by Valentine's Day	67%	66%	68%	67%

Source: TNS Retail Forward ShopperScape™

Men Giving Valentines … Women, Not So Much

The gender gap widened further this year between men and women in terms of their intentions to spend on Valentine’s Day gifts (Figure 4).

• About the same percentages of men (70%) and women (65%) are participating in Valentine’s Day spending as last year.
• But this year, men are more likely than women to say they intend to spend more than last (12% vs. 6%).
• Higher percentages of men and women are reporting intentions to spend less this year on Valentine’s Day than last year.

Figure 4

Compared to last year, do you plan to spend more, the same,
or less this year on gifts for Valentine's Day?



	Male Shoppers			Female Shoppers
	2006	2007	2008	2006	2007	2008
Much More/Somewhat More	8%	7%	12%	7%	9%	6%
About the Same	46%	52%	44%	41%	44%	42%
Much Less/Somewhat Less	13%	10%	14%	15%	12%	17%
Do not Purchase gifts for Valentine's Day	34%	31%	30%	38%	36%	35%

Source: TNS Retail Forward ShopperScape™

While greeting cards again top the list of Valentine’s Day gifts, the percentages of men and women anticipating their purchase have dropped dramatically from last year (Figure 5).

• Women are more likely to buy greeting cards and candy while men are more likely to buy flowers and fine jewelry—traditional differences between genders.  
• Candy as a gift is declining in popularity with both genders as consumers literally try to tighten their belts.
• New to the list this year is the ever-popular fall back gift: gift cards.  However, the percentage of shoppers planning to purchase them is relatively small: 8% for men and 10% for women Valentine’s Day shoppers.

Figure 5

Percentage Planning to Purchase Gift for Valentine's Day*



	Male Shoppers			Female Shoppers
	2006	2007	2008	2006	2007	2008
Greeting Cards	60%	69%	61%	69%	81%	73%
Candy	35%	44%	40%	44%	59%	55%
Flowers	40%	49%	49%	12%	15%	12%
Gift Cards	NA	NA	8%	NA	NA	10%
Fragrances/Cologne	8%	6%	6%	7%	10%	9%
Fine Jewelry	9%	10%	12%	5%	4%	5%
Costume Jewelry	1%	2%	4%	2%	4%	3%
Women's Lingerie	6%	6%	8%	7%	8%	7%
Men's Underwear	3%	3%	4%	6%	9%	8%
Clothing/Shoes	7%	5%	7%	7%	8%	7%
Consumer Electronics	3%	3%	5%	4%	5%	5%
Sporting Goods	2%	3%	3%	2%	4%	3%
Other**	16%	16%	14%	23%	25%	20%


*Among shoppers planning to purchase gifts for Valentine's Day
** Not comparable with 2006 or 2007 since Gift Cards added as a category.
Source: TNS Retail Forward ShopperScape™

Men have traditionally spent more than women on Valentine’s Day gifts, but the difference is more pronounced this year (Figure 6).

• Men who buy Valentine’s Day gifts estimate they will spend, on average, $95, not significantly more than they did last year.
• Women who buy Valentine’s Day gifts estimate they will spend, on average, $67, which is quite a bit less than the average $74 they estimated last year.
  

Figure 6

Average Overall Planned Spending on Valentine's Day*

*Among shoppers planning to purchase gifts for Valentine's Day
Source: TNS Retail Forward ShopperScape™

Turning Green

Recent ShopperScape™ findings compared with data collected a little more than a year ago show shoppers becoming more sensitive toward the sustainability issue (Figure 7).

• Just a little more than a year ago, the two top issues shoppers felt were important to them in terms of retailer or brand commitment were supporting workers’ rights and being involved in charitable practices/communities.
• Now, working to reduce waste and offering product recycling have risen to just below supporting workers’ rights in importance to shoppers. 
• Other sustainability issues—especially working to reduce greenhouse emissions—have become more important to shoppers too.

Figure 7

Importance to You of Retailer's or Brand's Commitment to Social Responsibility and
Environmentally Friendly Practices
(Shoppers rating issue 4 or 5 on 5-point scale where 5 = "Very important to me")

Source: TNS Retail Forward ShopperScape, November 2006 and January 2008

An upcoming Retail Forward Intelligence System™ Webinar will present additional findings from research conducted on sustainability.

Food Drug Mass—Shopping Frequency

“Shoppers returned to the stores in 2007 following a lower level of shopping incidence across food, drug and mass retailing in 2006 … but for how long?  Consumers are tightening their purse strings amid growing credit concerns, high food and fuel prices and a weakening economic climate.  Expect value to be fashionable once again as shoppers increasingly turn to supercenters, discount department stores and small-format value retailers.  Shoppers looking to save time and trips, as well as gasoline, will shop closer to home—which bodes well for neighborhood supermarkets and drug stores—or consolidate trips—which plays into the hands of the one-stop shopping supercenter format.”

Sandy Skrovan, Senior Vice President and Manager of the Food/Drug/Mass, Wal-Mart World™ and
Target programs of the Retail Forward Intelligence System™

For more information on Retail Forward Intelligence System™ contact Kathy Clarke at 614-355-4009 or kclarke@retailforward.com.

SAVE THE DATES!  TNS RETAIL FORWARD’S 2008 STRATEGIC OUTLOOK CONFERENCE DATE ANNOUNCEMENT—The 2008 Strategic Outlook Conference series moves to the fall this year.  Dates and locations are as follows:

Oct. 14, 2008           Los Angeles at the Hyatt Regency Century Plaza
Oct. 21, 2008           Chicago at the Donald Stephens Convention Center (Rosemont)
Oct. 29, 2008           New York City at the Marriott Marquis

Conference details will be announced as they are available.  Watch your Member Alert and Retail News Today™ for updates!

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