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Welcome to the ShopperScape™
Newsletter May 2009
 April’s slight uptick in spending sentiment is an encouraging sign following the previous month’s negative reaction to the passage of the economic stimulus package. The percentage of shoppers curbing their short-term retail spending plans fell from 55% in March to 51% in April—not quite as hopeful as February’s 45%, but more positive than any other month post-bailout. The 4 percentage point shift came from a 2 percentage point increase in shoppers planning to spend more and a 2 percentage point increase in shoppers planning to spend the same amount at retail in the coming month (Figure 1).
Figure
1
Intentions to Spend More, the Same or Less at Retail Stores
in the Coming Month Compared to this Time Last Year
Source: Retail Forward ShopperScape™, April 2008–2009
Despite slightly more positive sentiment toward short-term retail spending, the majority of shoppers (51%) are still in a penny-pinching mindset. Primary reasons for curbing spending are household’s current financial situations and concerns about the recession’s impact on households in the future (Figure 2).
- An upturn in retail spending primarily depends on stability in household incomes (tied to job security) and more hopeful attitudes about an economic recovery.
- However, more than one-quarter (27%) of shoppers planning to spend less indicate that they are curbing spending in an effort to simplify their lifestyles. Affluent households ($100k+) are most likely (36%) to cite this reason for cutting spending. This could signal a shift from the previous era of acquisition of the “next best thing” to more mindful purchasing behavior.
- A pickup in retail spending also is likely to be associated with healthier stock, housing and credit markets, but each of these factors seems to directly affect smaller percentages of households than concerns about jobs and future uncertainties.
Figure
2
Reasons Why Shoppers Plan to Spend Less
| |
Shoppers planning
to spend less
at retailers |
Retail spending pick up most likely depends
on change in: |
| My household’s current financial situation |
44% |
Income/job market |
Concerns about how the recession will affect me/my
household in the future |
38% |
Attitude about economy |
| Trying to simplify my household’s lifestyle |
27% |
Mindset |
| Cut back in household income |
27% |
Income/job market |
| Decline in worth of investments |
15% |
Stock market |
| Job loss of a household member |
12% |
Income/job market |
| Health concerns/illness in the household |
8% |
Family member health |
| Decline in value of home |
7% |
Housing market |
| Cannot get affordable credit |
3% |
Credit market |
| Other (specify) |
6% |
|
Source: Retail Forward ShopperScape™, April 2009
Another hopeful sign that shopper sentiment is stabilizing vs. deteriorating are their perceptions of household financial health. For all measures, the percentages of shoppers saying they are worse off than last year are either the same or slightly less than last month (Figure 3).
- Year-to-year comparisons show that job security and income levels are weighing more heavily on shoppers’ minds now than in April 2008.
- On the positive side, debt-related factors (i.e., credit cards, mortgage, car payments) are perceived as burdensome to fewer shoppers Y-T-Y.
- Wealth-related factors continue to weigh heavy on households. The percentage of households feeling worse off due to their investments and home values has remained steady this year, but those percentages remain much higher than a year ago.
Figure
3
Shoppers' Perceived Household Financial Health Compared with Last Year
| |
Apr-08 |
Jan-09 |
Feb-09 |
Mar-09 |
Apr-09 |
| |
|
|
|
| Job security of employed household members |
|
|
|
| Much/Somewhat Better Off |
16% |
15% |
15% |
14% |
14% |
| No Change from Last Year |
63% |
61% |
60% |
59% |
60% |
| Somewhat/Much Worse Off |
21% |
24% |
25% |
28% |
27% |
| |
|
|
|
|
|
| Household income level |
|
|
|
|
|
| Much/Somewhat Better Off |
30% |
30% |
29% |
26% |
27% |
| No Change from Last Year |
43% |
43% |
43% |
42% |
42% |
| Somewhat/Much Worse Off |
27% |
27% |
28% |
32% |
31% |
| |
|
|
|
|
|
| Credit card debt level |
|
|
|
|
|
| Much/Somewhat Better Off |
23% |
24% |
24% |
25% |
26% |
| No Change from Last Year |
52% |
52% |
55% |
53% |
52% |
| Somewhat/Much Worse Off |
25% |
24% |
21% |
22% |
22% |
| |
|
|
|
|
| Monthly mortgage and car payments |
|
|
|
|
| Much/Somewhat Better Off |
15% |
17% |
18% |
17% |
18% |
| No Change from Last Year |
67% |
70% |
68% |
69% |
68% |
| Somewhat/Much Worse Off |
18% |
12% |
14% |
14% |
14% |
| |
|
|
|
| Worth of household members' investments |
|
|
|
| Much/Somewhat Better Off |
16% |
10% |
9% |
9% |
9% |
| No Change from Last Year |
45% |
39% |
39% |
37% |
38% |
| Somewhat/Much Worse Off |
39% |
52% |
52% |
54% |
53% |
| |
|
|
|
|
|
| Value of my home |
|
|
|
|
|
| Much/Somewhat Better Off |
20% |
14% |
13% |
13% |
13% |
| No Change from Last Year |
48% |
50% |
49% |
48% |
49% |
| Somewhat/Much Worse Off |
32% |
37% |
38% |
39% |
39% |
Source: Retail Forward ShopperScape™, April 2008 and January– April 2009
 Shoppers are underwhelmed by the tax cut they’ve received—so underwhelmed that two-thirds of them either said they didn’t receive enough to notice a difference or didn’t think they received one at all (Figure 4).
- Those who noted a tax cut are divvying it up among paying for everyday expenses (20%), paying bills (17%) and putting it into savings (15%).
Figure
4
Plans for Using Federal Income Tax Cut from Economic Stimulus Package
| |
All Shoppers |
| I am not receiving enough extra money to notice a difference |
32% |
| Use for everyday expenses (e.g., groceries, gasoline) |
20% |
| Pay credit card or other bills |
17% |
| Put it into savings |
15% |
Use for a special purchase (e.g., small luxury items for
myself/family, go to a movie, etc.) |
3% |
| Make charitable donations |
2% |
| Eat out at restaurants more often |
1% |
| Other |
2% |
| None of the above/did not receive tax cut |
33% |
Source: Retail Forward ShopperScape™, April 2009
| MOTHER'S GET THE SHORT SHRIFT AGAIN |
 Spending on Mother’s Day gifts will be even less robust than last year as one-fifth of shoppers plan to spend less on Mom vs. last year and almost one-third (31%) won’t spend anything on Mother’s Day (Figure 5).
- The largest percentage (45%) of shoppers plans to keep its spending on par with last year.
Figure
5
Spending Intentions on Gifts for Mother's Day vs. Last Year
| |
2007 |
2008 |
2009 |
| Much more |
2% |
1% |
1% |
| Somewhat more |
7% |
4% |
3% |
| About the same |
50% |
49% |
45% |
| Somewhat less |
6% |
10% |
12% |
| Much less |
4% |
8% |
8% |
| Do not plan to spend anything for Mother's Day this year |
32% |
29% |
31% |
Source: Retail Forward ShopperScape™, May 2007, 2008 and 2009
Almost all categories of popular gifts are showing declines in percentages of shoppers planning to purchase them for Mother’s Day (Figure 6).
- Greeting cards remain the most popular present for Mother’s Day, but the percentage of shoppers planning to buy them has dropped dramatically: from 72% last year to 50% this year.
- Almost one-third (31%) plan to buy Mom flowers, down from 35% last year.
- The next-most-popular way to treat Mother will be taking her out to dinner (22%).
Figure
6
Categories Planning to Purchase for Mother's Day*
| |
May-08 |
May-09 |
| Greeting cards |
72% |
50% |
| Flowers |
35% |
31% |
| Dinner at a restaurant |
NA |
22% |
| Special meal at home |
NA |
10% |
| Clothing/shoes |
13% |
9% |
| Candy |
11% |
6% |
| Fragrances/cologne |
8% |
7% |
| Fine jewelry |
7% |
3% |
| Gift cards |
4% |
3% |
| Costume jewelry |
4% |
3% |
| Consumer electronics |
NA |
2% |
| Other/don't know** |
33% |
22% |
*Among shoppers planning to spend on Mother's Day gifts.
**In 2008 "Other" defined as "not including spending on services like dining out, movies, hotels, vacations, etc."
Source: Retail Forward ShopperScape™, May 2008 and 2009
ShopperScape™ members will receive 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 Rachel McGuire at rmcguire@retailforward.com or Mandy Putnam at mputnam@retailforward.com.
Target Outlook: Preparing for a New Decade, April 2009
Target has a lot on its plate in 2009. It must look for more ways to resonate with today’s shoppers and become more relevant in meeting their needs (not only their wants). This is a tall order, but Target must do it while also maintaining its edge as an affordable design destination, improving store-level execution, enhancing the multi-channel experience, and more. But Retail Forward believes there are some additional opportunities—e.g., improving price perception, facilitating quick trips, enhancing the service offer—that if pursued could help the retailer manage through the downturn and position it for future growth.
Jennifer Halterman
jhalterman@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. |
| 