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Welcome to the ShopperScape™
Newsletter May 2008
- Expect shoppers to remain cautious about spending on anything but necessities especially as pain at the pump and in grocery stores escalates.
- Realize that shoppers with investments are not feeling good about them. This will drive down the urge to splurge among Up Market households.
- Take note that many shoppers have no investments to fall back on—not even a savings account.
- Expect to work hard to gain a share of tax rebate checks as many shoppers plan to use them to pay down credit card debt or on everyday expenses.
- Take comfort that Mom generally won’t miss out on being acknowledged on Mother’s Day with at least a greeting card if not flowers, but expect some moderation in Mother’s Day spending this year.
Shoppers Nerves Fraying
Shoppers continue to grow more cautious about spending. Shoppers planning to spend less at retail stores compared with last year increased by 4 percentage points between March and April (Figure 1).
- Although Down Market shoppers are most likely to put the brakes on spending, Middle Market and Up Market shoppers are increasingly likely to pull in the reins.
Figure
1
Compared to this time last year, in the next month do you plan to…?
|
All Shoppers |
Down Market (Under $22,500) |
Middle Market ($22,500-$84,999) |
Up Market ($85,000+) |
|
March
2008 |
April
2008 |
April
2008 |
April
2008 |
April
2008 |
Spend much/somewhat more at retail stores than you did last year |
12% |
12% |
14% |
10% |
15% |
Spend about the same at retail stores as you did last year |
48% |
44% |
37% |
44% |
48% |
Spend much/somewhat less at retail stores than you did last year |
40% |
44% |
49% |
46% |
37% |
*Bolded/shaded figures indicates significant differences between column percentages.
Source: TNS Retail Forward ShopperScape™
Significantly more shoppers now say they are getting less for their money than they did the previous year—78% in April vs. 64% in September 2007 (Figure 2).
- Middle Market shoppers are feeling the pinch of inflation even more than Down Market and Up Market shoppers. Four-fifths of Middle Market shoppers (81%) feel they are getting less for their money.
Figure
2
Given current changes in prices, do you think you are getting…?
|
All Shoppers |
Down Market (Under $22,500) |
Middle Market ($22,500-$84,999) |
Up Market ($85,000+) |
|
September
2007 |
April
2008 |
April
2008 |
April
2008 |
April
2008 |
Much/somewhat more for your money than last year |
7% |
5% |
7% |
4% |
5% |
About the same amount for your money as last year |
29% |
17% |
18% |
16% |
20% |
Much/somewhat less for your money than last year |
64% |
78% |
75% |
81% |
75% |
*Bolded/shaded figures indicates significant differences between column percentages.
Source: TNS Retail Forward ShopperScape™
The percentage of shoppers who report spending much less due to the increase in gasoline prices has jumped dramatically from last July—from 21% to 37% (Figure 3).
- Not surprisingly, the Down Market is being battered hardest by rising gasoline prices. Half are spending much less elsewhere to compensate for paying more at the pump.
Figure
3
How has the increase in gas prices affected your overall spending?
|
All Shoppers |
Down Market (Under $22,500) |
Middle Market ($22,500-$84,999) |
Up Market ($85,000+) |
|
July
2007 |
April
2008 |
April
2008 |
April
2008 |
April
2008 |
I am spending much less due to the increase in gas prices |
21% |
37% |
48% |
38% |
26% |
I am spending somewhat less due to the increase in gas prices |
34% |
39% |
30% |
41% |
42% |
My spending has not changed due to the increase in gas prices |
45% |
24% |
21% |
22% |
32% |
*Bolded/shaded figures indicates significant differences between column percentages.
Source: TNS Retail Forward ShopperScape™
Worth of shoppers’ investments and their homes continue to head the list of households’ economic pain points. And the pain is deepening, reflected by double-digit increases in percentages of shoppers who feel worse off about their investments and home values vs. March (Figure 4).
- More shoppers in April are feeling worse off than shoppers did in March about all surveyed measures of personal economic health—albeit the percentages shifted far less for other factors other than investments and home values.
- Household income levels—likely evaluated relative to rising costs—are eroding in 27% of households. Concurrently, credit card debt levels are a rising concern for about one-fourth of households.
- Job security and monthly mortgage and car payments continue to represent the most stable areas of personal economic security, but both factors show a 7 percentage point drop in the percentage of shoppers who think they are better off than last year. Shoppers are nervous and growing increasingly insecure.
Figure
4
Compared to this time last year, how much better off or how much worse off is your household in terms of the following factors?
|
Much/Somewhat
Better Off |
No Change From
Last Year |
Much/Somewhat
Worse Off |
|
March
2008 |
April
2008 |
March
2008 |
April
2008 |
March
2008 |
April
2008 |
Job security of employed household members |
23% |
16% |
60% |
63% |
17% |
21% |
Household income level |
38% |
30% |
39% |
43% |
24% |
27% |
Credit card debt level |
29% |
23% |
50% |
53% |
21% |
25% |
Monthly mortgage and car payments |
22% |
15% |
64% |
67% |
15% |
18% |
Worth of household members’ investments |
25% |
16% |
49% |
46% |
27% |
39% |
Value of my home |
29% |
20% |
49% |
48% |
22% |
32% |
*Bolded/shaded figures indicates significant differences between column percentages.
Source: TNS Retail Forward ShopperScape™
Shoppers with investments are feeling worse about them, but almost one-quarter of shoppers’ households have no investments. Among Down Market households that percentage escalates to 53% (Figure 5a).
- Shoppers are feeling worse off about their savings accounts compared with last year—likely because they haven’t been able to contribute as much to them.
- After savings accounts, investments tied to stock market performance—401k plans, stocks and mutual funds—are most popular. As a result of the sharp decline in the stock market since the beginning of the year, large percentages of shoppers feel worse off about stock-related investments (Figure 5b).
- Shoppers with pensions and 529 college plan investments are most likely to feel good about those investments.
Figure
5a.
In which of the following do you currently have investments?
|
All
Shoppers |
Down Market (Under $22,500) |
Middle
Market ($22,500-$84,999) |
Up
Market ($85,000+) |
Savings Account |
51% |
29% |
52% |
68% |
401k |
39% |
10% |
37% |
67% |
Stocks |
25% |
8% |
23% |
43% |
Mutual Fund |
23% |
7% |
21% |
40% |
Pension |
22% |
7% |
22% |
32% |
Money Market Fund |
20% |
6% |
20% |
34% |
Certificates of Deposit |
19% |
9% |
20% |
26% |
Roth IRA |
17% |
6% |
14% |
31% |
Bonds |
12% |
4% |
11% |
21% |
Real Estate (other than primary dwelling) |
9% |
2% |
7% |
18% |
529 College Savings Plans |
6% |
0% |
4% |
16% |
Other |
9% |
6% |
9% |
11% |
None of the above |
23% |
53% |
19% |
7% |
Figure
5b.
Compared to this time last year, how much better off or how much worse off are your investments in the following?*
|
Much/
Somewhat
Better Off |
No Change From Last Year |
Much/
Somewhat
Worse Off |
Savings Account |
25% |
40% |
34% |
401k |
26% |
27% |
45% |
Stocks |
18% |
20% |
61% |
Mutual Fund |
18% |
24% |
56% |
Pension |
24% |
60% |
16% |
Money Market Fund |
18% |
33% |
48% |
Certificates of Deposit |
21% |
42% |
36% |
Roth IRA |
22% |
34% |
43% |
Bonds |
20% |
49% |
29% |
Real Estate (other than primary dwelling) |
30% |
33% |
36% |
529 College Savings Plans |
34% |
31% |
30% |
Other |
24% |
37% |
33% |
*Among all shoppers having investment
*Bolded/shaded figures indicates significant differences between column percentages.
Source: TNS Retail Forward ShopperScape™
Spending plans for tax rebate money have not changed significantly from February despite the best efforts of retailers to capture the rebate money (Figure 6).
- One-third of shoppers plan to pay bills with their money.
- Thirty percent plan to bank at least part of the money.
- Another quarter (23%) will use their rebate checks for everyday expenses. Down Market shoppers are more likely to use their rebates for everyday expenses vs. saving the money.
- Only 16% plan to spend the money on a special purchase.
Figure
6
The government is scheduled to mail out tax rebates later this year. If you get a rebate check,
how will you use the money?
|
All Shoppers |
Down Market (Under $22,500) |
Middle Market ($22,500-$84,999) |
Up Market ($85,000+) |
|
February, 2008 |
April, 2008 |
April 2008 |
April 2008 |
April 2008 |
| Pay credit card or other bills |
34% |
32% |
31% |
35% |
29% |
| Put it into savings |
30% |
30% |
24% |
31% |
33% |
| Use it for everyday expenses.e.g. groceries, gasoline, etc. |
24% |
23% |
30% |
23% |
17% |
| Use it for a special purchase.e.g., vacation, jewelry, or big-ticket consumer electronics items such as a computer or HDTV, etc. |
18% |
16% |
10% |
18% |
15% |
| I do not expect to get a rebate check |
10% |
10% |
19% |
6% |
13% |
| Other |
7% |
9% |
11% |
9% |
7% |
| Pay down mortgage debt |
4% |
3% |
3% |
3% |
4% |
| Make charitable donations |
3% |
2% |
2% |
3% |
3% |
*Bolded/shaded figures indicates significant differences between column percentages.
Source: TNS Retail Forward ShopperScape™
Moms and the Short Shrift
The good news is that about the half of shoppers will spend about the same on Mother’s Day gifts as they did last year on gifts (Figure 7).
- In 2007, the balance between tightwads and spendthrifts was about even—10% planning to spend less vs. 9% planning to spend more.
- This year, the percentage of shoppers planning to spend less than they previously did outnumbers those who plan to spend more by more than three to one.
Figure
7
Compared to last year, do you plan to spend more, the same, or less this year on gifts for Mother's Day?
|
All Shoppers |
Down
Market
(Under $22,500) |
Middle
Market ($22,500-$84,999) |
Up Market ($85,000+) |
|
2007 |
2008 |
2008 |
2008 |
2008 |
Much More |
2% |
1% |
1% |
1% |
2% |
Somewhat More |
7% |
4% |
5% |
4% |
5% |
About the same |
50% |
49% |
37% |
48% |
61% |
Somewhat Less |
6% |
10% |
9% |
10% |
9% |
Much Less |
4% |
8% |
11% |
7% |
6% |
Do not plan to spend anything for Mother's Day this year |
32% |
29% |
38% |
31% |
17% |
*Bolded/shaded figures indicates significant differences between column percentages.
Source: TNS Retail Forward ShopperScape™
The percentages of shoppers planning to purchase various popular categories of Mother’s Day gifts have each dropped by at least 1 percentage point (Figure 8).
- Although almost three-fourths (72%) plan to buy greeting cards this year, last year 78% were planning to buy them.
- Otherwise, the largest decline relative to the percentages of shoppers planning to buy the category is for fine jewelry—off 3 percentage points on a relatively small base of shoppers, or down from 10% to 7%.
Figure
8
How much do you plan to spend on the following types of gifts for Mother's Day this year?*
|
All Primary Shoppers |
Down Market
(Under $22,500) |
Middle Market
($22,500-$84,999) |
Up Market
($85,000+) |
|
Percentage Planning to Purchase |
Average Amount Planning
to Spend* |
Y-T-Y Difference in Percentage Planning
to Purchase |
Percentage Planning to Purchase |
Average Amount Planning to Spend* |
Percentage Planning to Purchase |
Average Amount Planning to Spend* |
Percentage Planning to Purchase |
Average Amount Planning to Spend* |
| Greeting Cards |
72% |
$6 |
-6 |
63% |
$5 |
72% |
$6 |
78% |
$6 |
| Flowers |
35% |
$28 |
-4 |
28% |
$17 |
34% |
$27 |
42% |
$34 |
| Clothing/Shoes |
13% |
$38 |
-1 |
13% |
$36 |
12% |
$36 |
15% |
$42 |
| Candy |
11% |
$11 |
-2 |
15% |
$8 |
11% |
$10 |
10% |
$14 |
| Fragrances/Cologne |
8% |
$33 |
-2 |
8% |
$25 |
8% |
$35 |
7% |
$35 |
| Fine Jewelry |
7% |
$44 |
-3 |
7% |
$41 |
6% |
$44 |
8% |
$44 |
| Gift Cards |
4% |
$38 |
NA |
3% |
$38 |
3% |
$41 |
5% |
$35 |
| Costume Jewelry |
4% |
$22 |
-1 |
4% |
$13 |
3% |
$24 |
5% |
$24 |
| Other (not including spending on services like dining out, movies, hotels, vacations, etc.) |
33% |
$37 |
-2 |
27% |
$27 |
34% |
$36 |
36% |
$43 |
*Among shoppers planning to spend on Mother's Day gifts.
*Average dollar amount presented
Source: TNS Retail Forward ShopperScape™
The Greening of Retail
As Earth Day 2008 approached, retailers unveiled a number of new earth-friendly initiatives. Macy’s is giving away a sapling to the first 100 shoppers in each store and is offering a percent-off shopping pass to shoppers who make a donation to the National Park Foundation. Whole Foods’ ban on plastic shopping bags takes effect on Earth Day. The Home Depot is encouraging consumers to use their tax rebates on its energy-saving Eco Options products to magnify the impact of their rebate dollars.
According to TNS ShopperScape™ data, a growing number of shoppers views a retailer’s commitment to these issues as important. However, only a quarter of all shoppers can identify a “green” retailer or brand on an unaided basis, and even fewer say a retailer’s commitment to a green agenda is a prime driver of store choice. Consequently, only a few retailers will be able to us sustainability and social responsibility issues as a meaningful differentiator. But as environmental issues remain front-page news, all retailers and manufacturers will need to become better citizens. Increasingly, the definition of corporate success will take into account environmental and social performance in addition to financial performance. Retailers and manufacturers should expect to be measured against an expanded set of criteria—planet and people as well as profit. Companies will be evaluated on how well they meet the needs of a wide variety of global stakeholders—customers, employees, suppliers, investors, communities and regulators. They will be judged on how well they manage and conserve increasingly scarce resources and how effectively they meet rising safety and wellness standards.
Mary Brett Whitfield
Senior Vice President of TNS Retail Forward and Director of the Retail Forward Intelligence System™
For more information on Shopper Update 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!
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/NFO'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. |
|
