With the U.S. unemployment rate edging downward a bit for November (albeit to a still eye-popping 10.0%), consumers remain optimistic that the employment environment will continue to improve during the first half of 2010…this month, 32.5% predict there will be “more” layoffs over the next six months, down nearly four points from November (36.2%). Almost half (45.7%) contend that levels will remain the “same” (v. 43.7% last month), while one-fifth (21.8%) hope for a decline, up slightly from 30 days ago (20.1%).

Personal concerns with becoming laid off remains relatively stable from November at 4.6% and well below the 8.4% recorded a year ago.

Increasingly practical and focused on the necessities, consumers are also banking on fiscal conservatism headed into the New Year…this month, more than one in three (34.4%) plans to pay down debt over the next quarter, rising from 32.6% a month ago. Plans to decrease overall spending (31.6%) is up a point from November, while those planning to pay with cash more often (i.e. rely on credit less) similarly increases. Increasing savings, though, is the biggest gainer at 26.9%, rising from 24.0% last month as well as 26.0% from a year ago:

So why are consumers shifting to saving? Perhaps it’s the 46.1% who disagree that they are saving enough to meet future needs, which rose from 44.4% a year ago. (One quarter – 24.6% – feels that they are saving enough). Or, maybe it’s the 35.0% who have claimed to have saved none of their income in the past 12 months, also increasing from a year ago (31.6%). Consumers are still on shaky financial ground, and this heightened focus on savings isn’t likely to spur spending in the near future.

With the DJIA holding ground above 10K over the past month, investor confidence remains constant as well…this month, 51.6% of investors say they would definitely/probably invest in the stock market, stable with November’s reading (51.8%). Investors are also maintaining a more bullish outlook over the next quarter…10.8% indicate they plan to buy stocks in the next three months, up from 8.7% in November. 5.5% plan to sell, up a point from a month ago (4.4%).

With national gas prices remaining a relatively stable $2.63/gal (source: AAA) compared to a month ago, drivers relax their concern about impending holiday price hikes…this month, half (52.4%) contend that pump prices will rise though New Year’s Day, falling from last month’s 68.0% who expected a spike at Christmas. Two in five (42.9%) predict that the cost of fueling up will remain the same, while a minor 4.7% expect a decline. Drivers are estimating an average price of $2.93/gal on January 1, slightly under last month’s $3.05/gal prediction for Christmas Day.

While prices at the pump aren’t currently making headlines, consumers are remaining vigilant about the shopping strategies they adopted to offset their fueling expenses. Compared to last month, consumers are increasingly buying more store brands (33.6%), comparing prices with ads (30.3%), shopping for sales more often (41.2%), and clipping coupons (37.4%).

With temperatures dropping for the winter, consumers are also contending with higher energy bills to heat their homes…some of the practical approaches being taken to offset these costs include adjusting the thermostat to reduce consumption (57.6%), wearing heavier clothing indoors (49.7%), installing energy-efficient lighting (25.3%), and shopping for necessities at lower prices (23.5%).
 

With holiday shoppers planning to make about a third (31.1%) of their purchases online this year, to what sites might we expect these Santas to surf? For both apparel and non-apparel items, Amazon.com and Walmart.com are the first and second choices, respectively. eBay.com is also a popular destination for both soft- and hard-lines, while JCPenney.com and Kohls.com are top contenders in apparel as well:

Whether online or in-stores, Women’s Clothing shoppers head to Walmart (11.9%) most often…Kohl’s follows two points behind with 10.1% (gaining from 9.0%) a year ago. JC Penney (7.2%), Macy’s (6.3%), and Target (2.9%) round out the Top 5.

Meanwhile in Men’s, Walmart’s lead (15.6%) increases over Kohl’s (9.2%) compared to one year ago, when the retailers maintained 14.8% and 9.0% customer share, respectively. The complete Top 5: Walmart (15.6%), Kohl’s (9.2%), JC Penney (8.8%), Macy’s (5.7%), Sears and Target (tied, with 3.0% each).

Practical parents purchasing for their little tikes are likely to head to the Children’s section for a new pair of jeans or a winter jacket to place under the tree…where can we expect these consumers to head? Discounter Walmart leads in this category, with 15.1% shopping there most often, nearly ten points ahead of nearest competitors Kohl’s (5.5%) and Target (5.2%). JC Penney (3.7%), Old Navy (2.1%), and Gap (2.1%) follow.

Walmart regains the lead in Shoes from Payless in December…leading now by a full point, the discounter (11.3%) bests the discount specialty (10.0%), though both retailers maintain a strong lead over the rest of the Top 5: Kohl’s (5.7%), DSW (3.5%), and JC Penney (3.3%).

While Santa is spared the Walmart-or-Toys R Us dilemma, his helper elves – er, parents – seem to be subject to this debate each Christmas. But armed with tight budgets this year and with the majority (54.2%) shopping a Toy store based on price, that big discounter is coming out ahead in December for Children’s Toys…with nearly one-quarter (23.3%) shopping there most often, Walmart leads Toys R Us (15.6%) by nearly eight points. Target (7.5%), Amazon.com (1.5%), and Kmart (1.1%) complete the Top 5, while selection (41.5%), location (30.8%), and brand selection (24.5%) follow price as top reasons to shop.

Walmart looks to be leading the toy battle for 2009, but what does the New Year have in store for the discounter and its competitors? According to this month’s Consumer Migrations Index (CMI), which tracks those who have immigrated to a store (new customers within the past year) against those who have emigrated (left within the past year), and where a positive rating spells net growth to a retailer, Toys R Us is experiencing a customer deficit with a -9.9 CMI, while discounters Walmart and Target enjoy positive CMI ratings:

What lessons might those at Toys R Us learn from its customer exodus? Shoppers who switched Toy stores in the past year cite high prices (21.0%) and inconvenient location (11.9%) as the top culprits. Long checkout lines (6.2%), poor customer service (5.7%), and poor selection (5.7%) followed.

So what about Toys for those big girls and boys? For hot Electronics items like TVs, netbooks, and video games, shoppers are still very likely to head to big box Best Buy, where one in three (33.1%) shops most often, gaining from 29.8% a year ago. Walmart follows with 20.6% (also up from 17.0% in December ’08), while Amazon.com (3.6%), Target (2.8%), and Sears (2.0%) complete the Top 5.

Grocers (55.8%) continue to trump discounters (21.8%) for the collective stores shopped most often for foodstuffs, but specifically speaking, that one big discounter still maintains a substantial lead…with 18.9% shopping there most often, Walmart is ahead of Kroger (6.5%), Publix (3.7%), Safeway (3.2%), and Shoprite (2.2%).

With one in ten shopping either CVS (10.7%) or Walgreens (10.2%) for Health & Beauty Care, these druggists seemingly have a substantial customer share of this market. Though add Walmart to this mix, and you’ll find that the Bentonville behemoth maintains a mammoth 20 point lead over these competitors with one in three shopping there most often. The complete Top 5: Walmart (31.9%), CVS (10.7%), Walgreens (10.2%), Target (5.9%), Rite Aid (3.1%).

It’s a different story, though, when it comes to filling Prescriptions…druggists Walgreens (16.3%) and CVS (15.0%) have a corner on this market, though Walmart is a close #3 (11.3%)…each of these retailers has gained at least a point over the past year. Rite Aid (5.6%) and Target (2.2%) follow.
 

Languishing confidence, the two-digit unemployment rate, a focus on practicality, and plans for increasing personal savings appear to be affecting the 90 Day Outlook, according to the BIGresearch Diffusion Index (those who say they’ll spend less subtracted from those who’ll spend more).  While all categories improved from a year ago, they have still failed to recover from December ’07:

Retail Merchandise Categories - 90 Day Outlook
(Dec-09 compared to Nov-09, Dec-08, and Dec-07)