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Welcome to the ShopperScape™ Newsletter April 2008

• Expect shoppers to rein in spending until they hear some optimistic news on the economy.  Even though most are not experiencing major downturns in their personal financial situations, short- and long-term pain points are dampening short-term spending plans.
• Prepare for cautious spenders regardless of income segment—not just lower income shoppers.
• Anticipate shoppers to pull back on personal apparel spending, but not as much on spending on their kids’ apparel.
• Expect shoppers not to be spending as much this spring on landscaping and gardening perhaps in part due to stagnant or declining home values in many parts of the country.  However, spending for landscaping and gardening is not expected to drop off as steeply as adult apparel spending. 

Shoppers in the Doldrums

Compared with February results, more shoppers are feeling worse off especially about their investments.  Although measures of personal economic health only shifted modestly into the “worse off” column between February and March—not significant except for two areas—all measures but credit card debt level have headed south (Figure 1).

• Shoppers are most pessimistic about the worth of household members’ investments.  More shoppers in March felt their investments declined in value compared with February’s shopper perspectives.
• More shoppers perceived the values of their homes declining in March vs. February.  But shoppers who felt good about their housing values still outnumber those who felt their housing values have declined from last year.

It’s unlikely that long-term concerns—investments and housing values—are the only, or even the most critical factors, creating short-term problems for retailers however.  High gasoline prices and rising food prices are “in-your-face” reminders that dampen short-term spending plans. 

Figure 1

Compared to this time last year, how much better off or how much worse off
is your household in terms of the following factors?

Bolded/shaded figures indicate significant differences between column percentages.
Source: TNS Retail Forward ShopperScape™, February and March 2008

In just one month, shoppers’ spending plans have taken a nosedive.  Most of the movement has shifted from spending about the same amount at retail stores as last year—down 11 percentage points—to spending much less at retail stores as last year—up 11 percentage points (Figure 2).

• Although the sentiment is most pronounced among Down Market shoppers, significant percentages in all income segments are planning to downshift their spending.  Consequently, even upscale retailers will be affected.

Figure 2

Compared to this time last year, in the next month do you plan to…?

Bolded/shaded figures indicate significant differences between column percentages.
Source: TNS Retail Forward ShopperScape™, February and March 2008

Dark Moods Dampen Bright Colors

This season’s bright fashion palette—albeit hard to overlook in stores and fashion magazines—will not likely persuade as many shoppers this year to buy new clothes for themselves as they did last year (Figure 3).

• More than one-third of shoppers (36%) plan to spend less this year updating their personal wardrobes.
• Down Market shoppers will be least likely to update their spring wardrobes.

Figure 3

Please select the statement that best describes your plans for updating
your personal wardrobe for the spring this year compared to last year.

Bolded/shaded figures indicate significant differences between column percentages.
Source: TNS Retail Forward ShopperScape™, March 2007 and March 2008

Although one-third of parents are planning to pull back on their personal wardrobe spending, most plan to spend at least the same amount as they did last year on their kids’ wardrobes (Figure 4).

• Parents who plan to spend more than last year on updating their kids’ wardrobes outnumber those who plan to spend less by two to one.
• Parents are less likely than the total shopper population (Figure 3) to be planning personal wardrobe cutbacks.

Figure 4

Plans for Updating Personal vs. Kids' Wardrobe this Spring

*Among shoppers with children under the age of 18 present in the household
Bolded/shaded figures indicate significant differences between column percentages.
Source: TNS Retail Forward ShopperScape™, March 2008

Less Digging in the Dirt

Compared with shoppers polled in March 2007, this year’s shoppers are much more likely to be cutting back on landscaping and gardening vs. last year (Figure 5).

• With 34% of shoppers planning to spend less, reining in spending on posies is not quite as pronounced as the pullback in apparel spending plans (36%).
• Up Market shoppers are less likely to curb spending on landscaping and gardening compared with other shoppers and also compared with their apparel spending.

Figure 5

Please select the statement that best describes your plans for
gardening and landscaping around your home this spring.

Bolded/shaded figures indicate significant differences between column percentages.
Source: TNS Retail Forward ShopperScape™, March 2007 and March 2008

Reversing the Baby Boom Bust

Only a few years ago, retailers targeting female Baby Boomers were among the apparel specialty store channel’s high-fliers. But weaker store traffic and stale merchandise have depressed comparable-store sales, and markdown and inventory issues and outdated sourcing models have shrunk margins. The recent slowdown in consumer spending has only compounded these difficulties. As four key players in the Baby Boomer apparel specialty store channel―Chico’s, Christopher & Banks, Coldwater Creek and Talbots―try to regain the favor of this still-appealing demographic, they appear to be working from the same playbook. New initiatives include adding new talent to management, reviewing the store portfolio, increasing direct sourcing, revising promotional strategies and most importantly fine-tuning the merchandise offer.

Kelly Tackett, Senior Consultant, TNS Retail Forward

For more information on Retail Perspective reports and the Retail Forward Intelligence System™ call Kathy Clarke at 614-355-4009 or email her at 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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