For
additional information contact:
Katherine R. Clarke
TNS Retail Forward
614/355-4009
kclarke@retailforward.com
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Retail Sales Forecast to Get Big Boost from Tax Rebate, TNS Retail Forward Reports
COLUMBUS, April 28, 2008─Federal tax rebates will give retail sales a significant and much needed boost in the next two quarters. TNS Retail Forward predicts that retail sales growth will improve by as much as 3 percentage points in the third quarter and half that in the second quarter.
TNS Retail Forward estimates that households will spend as much as $42 billion—of the $105.7 billion tax rebate total—at retail stores from May through the end of the year, with most of the incremental retail spending occurring in the third quarter. Year-to-year growth for the second quarter growth is forecast at 3.5% with the tax rebates instead of 2.0% without the rebate impact. Third quarter growth is forecast at 6.0% instead of 3.0% without the tax rebate impact. The sales forecast is of retail sales excluding autos and gasoline as reported by the U.S. Department of Commerce.
“Retailers and suppliers should maximize their efforts to benefit from the tax rebates because growth prospects otherwise look bleak through the end of the year,” comments Frank Badillo, Senior Economist at TNS Retail Forward. “Growth remains threatened by lingering fallout from the credit crunch, which is dampening investment and raising job insecurity. Also weighing heavily on growth is persisting inflation—largely in food and fuel—that is taking a toll worldwide and complicating efforts by central bankers to reignite growth,” he adds.
How much and where U.S. shoppers spend in the coming months will vary by income segment. TNS Retail Forward ShopperScape™ research indicates that down-market to mid-market shoppers, who are most likely to receive and spend a tax rebate, will remain focused on value and everyday purchases. Mid-to-up-market households will be more inclined to make big ticket purchases, which will likely benefit sales of consumer electronics and some home furnishings. TNS Retail Forward expects homegoods sector sales will likely remain weak while discount department stores, supercenters, warehouse clubs and other value-focused retailers will fare best. The outlook will be mixed for softgoods retailers, with some improving while others languish. Additional insights and analysis of the impact of the tax rebates and global inflation is available to members of the Retail Forward Intelligence System™ in the April issue of the Retail Update.
A combined 41% of ShopperScape™ survey respondents confirmed they intend to use their rebate check for either everyday living expenses or to make a special purchase. More households are expected to use the rebate to pay down debts, among other things.
“While the impact of the tax rebates is significant, it is unlikely that these rebates will lead to a sustained economic rebound,” concludes Badillo.
All Shoppers |
Down Market (Less than $22,500) |
Middle Market ($22,500– $84,999) |
Up Market ($85,000+) |
|
| Pay credit card or other bills | 32% |
31% |
34% |
30% |
| Put it into savings | 30% |
25% |
30% |
32% |
| Use it for everyday expenses (e.g., groceries, gasoline, etc.) | 23% |
31% |
24% |
16% |
| Use it for a special purchase (e.g., vacation, jewelry, or big-ticket consumer electronics items such as a computer or HDTV, etc.) | 19% |
14% |
19% |
20% |
| Pay down mortgage debt | 4% |
2% |
4% |
5% |
| Make charitable donations | 3% |
2% |
3% |
4% |
| Other | 7% |
7% |
7% |
6% |
| I do not expect to get a rebate check | 9% |
17% |
6% |
11% |
| *Multiple answers allowed Source: TNS Retail Forward ShopperScape™, February 2008 |
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About TNS Retail Forward
TNS Retail Forward, Inc. (www.retailforward.com
») is a global management consulting and market research firm specializing in retail intelligence and strategies. The company's syndicated research and executive development program, known as the Retail Forward Intelligence System™, provides members with an authoritative perspective on the retail and consumer products industries.
The TNS Retail Forward ShopperScape™ survey is conducted monthly with a sample of 4,000 U.S. primary household shoppers. The survey is conducted online among a nationally representative sample of households. Results from the survey are available to members of the Retail Forward Intelligence System™ and ShopperScape™ as well as through individual reports available for purchase. For more information on ShopperScape™ or the Retail Forward Intelligence System™, contact Kathy Clarke (kclarke@retailforward.com ») or visit the company's Web site at www.retailforward.com ».
About TNS
TNS is a global market insight and information group. Our strategic goal is to be recognized as the global leader in delivering value-added information and insights that help our clients to make more effective decisions.
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