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Welcome to the ShopperScape™ Newsletter July 2006
Shoppers travel farther to visit a supercenter than a discount store, but not by much.
SOFTER
SPENDING IN STORE
Figure 1 Retail
Forward Future Spending Index™
Source: Retail Forward ShopperScape™. The Retail Forward Future Spending Index combines households' current assessments of key drivers of spending across income segments, including the job situation, incomes, investments, debt levels, home buying, and seasonal factors to produce a forward-looking indicator of spending for the coming month.
ShopperScape™ findings this month show that most shoppers have changed their shopping habits during the past year. Unfortunately for retailers, the change in shopping behavior most likely means they are shopping less often. This information is consistent with the trend in shopping at fewer stores across many lines of trade, which Retail Forward's ShopperScape™ has recorded in recent years.
Figure 2 Which of the following statements best describes how much your shopping habits have changed in the past year? My shopping habits have changed…
Source: Retail Forward ShopperScape™. Shoppers Trading Down, Often to Trade Up
Figure
3
Are you generally shopping at more expensive retailers (stores, Web sites or catalogs) or less expensive retailers or the same types of retailers as you did last year?
Source:
Retail Forward ShopperScape™.
ShopperScape™
data indicate the biggest beneficiaries of larger shares of incomes
are supermarkets (27%) and supercenters (22%). In contrast, the
biggest declines in spending as a share of income are being reported
for department stores—15% for both traditional department
stores and value department stores. This strongly suggests that
consumers are spending more of their incomes on basic goods such
as consumables and less of their incomes on discretionary items
sold through retailers with a Middle Market focus (Figure 4).
Figure
4
At which of the following retailers or types of retailers, if any, are you spending a larger percentage of your income than you did last year?
Source:
Retail Forward ShopperScape™.
As
the middle of summer passes parents are already anticipating increasing
their spending on school supplies next month. Shoppers also plan
to purchase more home textiles—bath, bedroom and kitchen—in
the coming month than last. This may reflect, in part, anticipation
of sending kids off to college and outfitting their dorm rooms.
(Figure 5). Figure 5 Categories Shoppers Plan to Purchase in the Next Four Weeks
Likely
anticipating an outflow of spending for children's back-to-school
wardrobes and supplies, Mom looks as if she is planning to reduce
her personal wardrobe shopping during the next month especially
in sportswear categories. Also on the decline, especially year-to-year,
are greeting cards. Of no surprise, shoppers are losing interest
in garden and lawn care spending as the summer rolls on. Figure 6 Categories Shoppers Plan to Purchase in the Next Four Weeks
Economic Forecast, June 2006 "Despite the pressures of spiking energy prices, rising interest rates, elevated debt loads and devastating hurricanes, consumers in 2005 managed to generate the strongest inflation-adjusted retail sales growth in more than two decades. The strong momentum carried into the first quarter of 2006, when sales increased at nearly a double-digit pace. As a result, Retail Forward forecasts full-year 2006 growth to improve on last year's robust pace." Steven Spiwak, Senior Consultant and Manager of Homegoods For more information on Economic Forecast, June 2006 or the Retail Forward Intelligence System™ call Kathy Clarke at 614-355-4009 or email her at kclarke@retailforward.com.
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Expect
consumers, especially Middle and Up Market shoppers, to pull back
the reins on spending in July.
Traveling
to the Supercenter on Fumes
Look
for Up and Middle Market households, which account for the vast
majority of retail spending, to pull back on spending in July. Down
Market households, however, say they plan to spend at a somewhat
stronger pace (Figure 1).
Shopping
Habits Continue to Evolve
Many
shoppers indicate that they are trading down to less expensive
retailers this year. Many also are shopping more expensive retailers
at the same time, suggesting that money saved by trading down
is often being used to purchase items at higher-end retailers.
Consumer
Bucks…Where They Are Going and Where They Are Not
Going
Up: Back-to-school Anticipation
Going
Down: Mom Cuts Back on Her Wardrobe
