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Welcome to the ShopperScape™
Newsletter March 2009
| BOUNCING BACK FROM THE BOTTOM |
 Despite steady exposure to the drumbeat of layoff and market woe news, shoppers turned less pessimistic in February regarding short-term spending plans. Ten percent fewer shoppers plan to spend less and ten percent more plan to spend the same amount during the next four weeks compared with this time last year. Because shoppers curbed their spending substantially in the fourth quarter in 2008, their wallets could be opening wider to fulfill pent-up demand for goods they put off buying. Also, some could be anticipating tax refunds to fund postponed purchases (Figure 1).
Figure
1
Intentions to Spend More, the Same or Less at Retail Stores Compared to This Time Last Year
Source: Retail Forward ShopperScape™, February 2008 to February 2009
The uptick in short-term spending plans is counter to expectations based on February’s measures of households’ financial health—in particular, those related to earning power and long-term investments (Figure 2).
- More shoppers feel insecure about family members’ employment as job losses mount across the nation.
- Fewer shoppers feel their household income levels are improving.
- Fewer shoppers are worse off than last year regarding their credit card debt, which is likely reflective of tightening consumer credit—positive for shoppers but not necessarily good news for retailers.
- Attitudes about monthly mortgage and car payments have remained about the same since last fall. More shoppers are in better shape than they were last spring but fewer shoppers are able to finance cars or houses.
- Erosion of 401k plans and other investments continues to weigh on shoppers, as reflected in the 52% of shoppers who believe they are worse off than last year in terms of their investments.
- Four out of 10 shoppers believe the value of their homes has fallen from last year.
Figure
2
How Shoppers Perceive Household Financial Health Compared with Last Year
| |
Mar-08 |
Apr-08 |
Oct-08 |
Nov-08 |
Dec-08 |
Jan-09 |
Feb-09 |
| |
|
|
|
|
|
| Job security of employed household members |
|
|
|
|
|
| Much/Somewhat Better Off |
23% |
16% |
17% |
16% |
14% |
15% |
15% |
| No Change from Last Year |
60% |
63% |
60% |
61% |
62% |
61% |
60% |
| Somewhat/Much Worse Off |
17% |
21% |
23% |
23% |
24% |
24% |
25% |
| |
|
|
|
|
|
|
|
| Household income level |
|
|
|
|
|
|
|
| Much/Somewhat Better Off |
38% |
30% |
28% |
27% |
28% |
30% |
29% |
| No Change from Last Year |
38% |
43% |
42% |
43% |
44% |
43% |
43% |
| Somewhat/Much Worse Off |
24% |
27% |
30% |
30% |
28% |
27% |
28% |
| |
|
|
|
|
|
|
|
| Credit card debt level |
|
|
|
|
|
|
|
| Much/Somewhat Better Off |
29% |
23% |
23% |
23% |
21% |
24% |
24% |
| No Change from Last Year |
50% |
52% |
51% |
52% |
54% |
52% |
55% |
| Somewhat/Much Worse Off |
21% |
25% |
26% |
25% |
25% |
24% |
21% |
| |
|
|
|
|
|
|
| Monthly mortgage and car payments |
|
|
|
|
|
|
| Much/Somewhat Better Off |
22% |
15% |
17% |
16% |
16% |
17% |
18% |
| No Change from Last Year |
63% |
67% |
65% |
69% |
69% |
70% |
68% |
| Somewhat/Much Worse Off |
15% |
18% |
18% |
15% |
14% |
12% |
14% |
| |
|
|
|
|
|
| Worth of household members' investments |
|
|
|
|
|
| Much/Somewhat Better Off |
25% |
16% |
10% |
9% |
8% |
10% |
9% |
| No Change from Last Year |
49% |
45% |
38% |
38% |
41% |
39% |
39% |
| Somewhat/Much Worse Off |
26% |
39% |
52% |
53% |
51% |
52% |
52% |
| |
|
|
|
|
|
|
|
| Value of my home |
|
|
|
|
|
|
|
| Much/Somewhat Better Off |
29% |
20% |
17% |
14% |
13% |
14% |
13% |
| No Change from Last Year |
49% |
48% |
49% |
50% |
51% |
50% |
49% |
| Somewhat/Much Worse Off |
22% |
32% |
34% |
36% |
36% |
37% |
38% |
Source: Retail Forward ShopperScape™, March, April, October, November and December 2008 and January and February 2009
 Currently shoppers are employing a variety of tactics to save money on groceries and household products they buy on a regular basis. (Look for an upcoming Food/Drug/Mass report to provide an in-depth analysis). Tactics can be grouped into four general buckets (Figure 3).
- Tactics for limiting spending on food and household items—especially curbing impulse purchases—are popular. Of these types of tactics, buying fewer items on impulse is reported to be most likely adopted permanently by shoppers.
- Almost as popular are tactics related to trading down in terms of the types of consumable products shoppers are buying which means buying fewer premium products and more private brands. “Just too expensive” gourmet-type products are likely to be permanently crossed off the lists of one in five shoppers.
- Shoppers are seeking deals and re-engaging in avid coupon-clipping.
- A smaller, but substantial, percentage of shoppers—23%—are consolidating their shopping among stores offering the best values. One in 10 shoppers plans to continue to focus spending at stores offering the best values.
Figure
3
Common Tactics Shoppers Using to Save Money on Grocery and Household Products
| |
Percentage
of Total Shoppers Using |
Percentage of Total Shoppers Extremely Likely to Retain |
| Limiting Their Spending |
|
|
| Buying fewer items on impulse |
48% |
17% |
| Eating out at restaurants less frequently or eating out at less expensive restaurants |
40% |
11% |
| Sticking more to buying only items on my grocery list |
38% |
13% |
| Spending less overall on food and other household essentials |
31% |
10% |
| |
|
|
| Changing What They Buy |
|
|
| Not buying food items that seem “just too expensive” |
47% |
19% |
| Buying less expensive versions of products on my shopping list than those I normally buy |
31% |
11% |
| Buying more private brand or store brand products |
29% |
12% |
| |
|
|
| Deal Seeking |
|
|
| Using coupons more frequently |
36% |
18% |
| Using specials/sales in store circulars to determine what I buy |
32% |
14% |
| Stockpiling often-used items when they’re on sale |
30% |
15% |
| Buying multiple items at one time in order to get better deals (e.g., buy one get one free, buy one get one half off, 10 items for $10 promotions, etc.) |
30% |
14% |
| |
|
|
| Changing/Consolidating Where They Buy |
|
|
| Consolidating my spending at stores that I think offer the best value overall |
23% |
10% |
Source: Retail Forward ShopperScape™, February 2009
| RETENTION IN THE AFTERMATH |
 Walmart is currently benefitting from the shopper surge to value at the expense of other retailers. But will Walmart be able to lasso these shoppers long term? Shoppers’ perceptions of retailers they’ve shopped during the past four weeks indicate that Walmart significantly lags other retailers—especially grocers Publix and Kroger—in terms of improving customer service. As retailers seek to conserve cash, shoppers will face deteriorating levels of customer service, which puts relationships between retailers and shoppers at risk. (Figure 4).
Figure
4
Rating Customer Service Compared with Last Year
| |
Publix |
Kroger/ Kroger Marketplace |
Albertsons |
Safeway |
SuperTarget |
Target |
Walmart Neighborhood Market |
Walmart Discount Store |
Walmart Supercenter |
| Sample size |
312 |
581 |
362 |
386 |
422 |
1418 |
277 |
1160 |
1893 |
| Much/somewhat better |
24% |
21% |
20% |
14% |
15% |
12% |
16% |
14% |
14% |
| No change |
70% |
71% |
68% |
76% |
76% |
78% |
61% |
69% |
70% |
| Much/somewhat worse |
4% |
6% |
10% |
7% |
7% |
8% |
13% |
15% |
15% |
| Don't know |
2% |
2% |
2% |
3% |
2% |
3% |
11% |
3% |
2% |
| PPD Difference: Better— Worse |
+20 |
+15 |
+10 |
+7 |
+8 |
+5 |
+3 |
-1 |
-1 |
Source: Retail Forward ShopperScape™, February 2009
ShopperScape™ members will receive more a more detailed analysis of current shopping trends and spending plans. ShopperScape™ members also can request assistance in custom analyses of this information by contacting rmcguire@retailforward.com or mputnam@retailforward.com.
Wal-Mart World™ Shopper Update: Annual Shopper Review, March 2009
Walmart’s low-price leadership and its increasingly resonant “Save money. Live better.” brand promise has allowed the retailer to minimize the effect of the incredibly difficult consumer spending environment on its frequent shopper base. In fact, while most channels and retailers experienced declining traffic in 2008, Walmart Supercenter was able to grow its monthly shopper base by 1.1 percentage points last year, according to Retail Forward ShopperScape™ data. Although Walmart continues to grow its share of shopper preference across most key categories, analysis of category purchasers suggests that the retailer still has an opportunity to convert the more affluent and educated segments of its monthly shopper base into whole-store shoppers and purchasers.
Kelly Tackett
ktackett@retailforward.com
For more information about RFIS reports and ShopperScape™, please contact
Katherine R. Clarke at kclarke@retailforward.com or 614-355-4009. |
What's
Retail Forward ShopperScape™?
Retail Forward ShopperScape™ focuses on today’s consumers and their shopping behaviors. 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. 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. |
| 