While the U.S. unemployment edged downward in January, consumers still appear a little wary about the labor pool…this month, 30.6% contend there will be “more” layoffs over the next six months, just slightly lower than January (31.0%). About half (49.4%) believe layoff levels will remain the “same,” rising from 45.8% last month, while a decreasing number of consumers (20.0%) are optimistically predicting “fewer,” compared to January’s 23.2%.

Those with personal concerns about becoming laid off edge upward from January (4.4%) to 5.0%... this number is still well below Feb-09’s record-setting 10.6%.

Paying down debt remains the priority over the next three months for more than a third of consumers…in February, 35.1% declared their desire to put a dent in their debt, lowering from 37.9% last month. Those planning to decrease overall spending declines sharply from a month ago (37.0%) to 30.0%...increase savings (27.9%) and pay with cash more (21.5%) also weaken from 30 days ago.

While fiscal conservancy diminished in February, this doesn’t mean that consumers are feeling better about their financial standing…two in five (42.3%) say they aren’t saving enough to meet their future needs (compared to the 26.2% who say they are). Additionally, 41.3% say their personal financial situation is “worse off” compared to a year ago (14.0% contend they are “better off.”) And the icing on the cake: nearly half (49.0%) say they have too much month at the end of their paychecks “all” or “most” of the time. 

The DJIA drop at the end of January appears to have rattled investor confidence this month…in February, 51.5% of investors say they would definitely/probably invest in the stock market, lowering three points from last month (54.6%), but still gaining from Feb-09 (42.0%).

While gas prices have remained relatively stable in the mid-$2/gal range, consumers continue to retain the smart shopping habits they adopted when pump prices were nearly double what they are today…more than a third are shopping for sales more often (40.3%), taking fewer shopping trips (39.6%), shopping closer to home (37.7%), and clipping coupons with greater frequency (36.9%). Additionally, nearly one in three (31.8%) continue to opt for more store brand/generic products.

And, drivers are remaining somewhat cautious about the future direction of prices at the pump…two in five (43.4%) predict that gas prices will rise through St. Patrick’s Day. Half (51.3%) contend they will remain the same, while only 5.2% are optimistic about a decline. The estimated pump price at the wearing of the green is $2.88/gal, about $0.25 higher than the current national average ($2.641/gal, source: AAA).
 

Interesting, while practicality and focus on necessities have declined in the past year, when it comes to clothing, consumers remain bent toward buying bargains…in February, one in four (25.9%) says they only buy clothing on sale (up slightly from 25.1% in Feb-09), while one in ten (11.5%) contends that sales aren’t important (down a point from a year ago). The majority (62.6%) continues to “usually” shop for specials.

In Women’s Clothing, Kohl’s continues to close the gap between it and #1 Walmart…this month, one in ten (10.4%) shops the department store most often, less than a point behind the 11.1% who prefer the discount behemoth. JC Penney (6.5%), Macy’s (5.3%), and Target (2.7%) follow.

One year ago, Walmart (11.5%) led Kohl’s (8.5%) by three points in this category…so what consumer group contributed to the share growth for Kohl’s? According to the latest Retail Ratings Report for Women’s Clothing, consumer share for the department store increased nearly 30% over a year’s time among upper income households (those earning $50,000+/yr.) Click here for a sample: http://www.bigresearch.com/big-cias-rrr-jan10-womens.pdf

To learn more about the Retail Ratings Reports (available for 12 major merchandise categories), call 1-800-800-4462 or visit us on the web at www.BIGresearch.com.

The situation is a little less catty over in Men’s…Walmart (15.3%) and Kohl’s (9.9%) are tops in this category, with both retailers gaining from the previous year. JC Penney (8.4%), Macy’s (5.3%), and Target (3.1%) complete the Top 5.

It’s more of the same in the Children’s sections as well, though Walmart (12.3%) carries a substantial lead over #2 Kohl’s (4.9%) as well as Target (4.1%), JC Penney (3.0%), The Children’s Place (1.6%), and Old Navy (1.6%).

And, it’s the discounter over the discount specialty this month in Shoes…with 10.8% shopping there most often, Walmart trumps Payless (9.7%) by just a point. Kohl’s (6.0%), DSW (3.9%), and JC Penney (3.5%) continue to trail.

Switching from softlines to Electronics, Best Buy continues as consumers’ top pick…35.7% of shoppers head to the big box most often, leading #2 Walmart (20.9%) by nearly 15 points. Both retailers, though, maintain substantial share over the rest of the Top 5: Amazon.com (3.0%), Sears (2.5%), and Target (2.5%). It should come as no surprise that seven in ten (73.3%) budget-conscious consumers opt for their favorite Electronics store based on price…selection (56.1%), location (43.5%), and quality (39.0%) follow.

Will Best Buy remain on top in the long-term? Review the insights from our Consumer Migration Index (CMI) for Electronics this month, and you’ll find who is gearing up for future growth...the 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, shows that with a +3.9 rating, Walmart has enjoyed a net customer gain in the past year (likely from the demise of brick-and-mortar Circuit City shops), while Best Buy’s growth was a little weaker (+0.9):

Besides the obvious reason to switch (the downfall of Circuit City), what other issues had consumers shifting loyalties among Electronics retailers? High prices (24.2%) were the top culprit, followed by inconvenient location (11.7%), poor customer service (11.6%), poor selection (7.8%), and unknowledgeable salespeople (6.9%).

With the Winter Olympics upon us, where might we expect inspired spectators to head for new ski equipment, snowboards, or perhaps a pair of ice skates? More than one in ten (12.9%) say they shop Walmart most often for Sporting Equipment/Exercise Equipment, besting the 11.8% who shop big box Dick’s most often. Sports Authority (4.9%), Big 5 (3.0%), and Academy (2.8%) follow.

That big discounter continues to lead traditional grocers in the foodstuffs aisle...nearly one in five (17.4%) contend they shop Walmart most often for Groceries, more than double the share of second place Kroger (6.4%). Publix (3.5%), Safeway (2.5%), and Meijer & Shoprite (tied, with 2.3% each) round out the Top 5.

With nearly two in three (63.6%) regularly or occasionally shopping for Organics, what types of eco-conscious items might we find in these consumers’ carts? Produce (52.2%) is most likely to top shoppers’ lists, followed by breads (31.4%), cereals (30.0%), dairy products (28.1%), juices (27.7%), and meat & poultry (27.5%). Walmart (10.6%), naturally, is the top store shopped for Organics, followed by Whole Foods (7.6%), Kroger (5.7%), Trader Joe’s (5.6%), and Publix (2.6%).

With triple the share of its nearest competitor, Walmart will likely be sitting pretty in Health & Beauty Care for the long-term…with 28.8% shopping there most often, the big discounter leads CVS (8.8%), Walgreens (8.5%), Target (6.3%), and Rite Aid (3.3%).

Druggists, though, still corner the market on Prescription Drugs…Walgreens (15.5%) and CVS (14.7%) lead here, followed relatively closely by #3 Walmart (11.0%). Rite Aid (5.3%) and Target (2.0%) complete the Top 5.
 

There were a few bright spots this month from a retailer’s perspective (i.e. fewer focused on practicality, necessities, fiscal conservatism), which appear to be buoying the 90 Day Outlook from last month and last year for most categories, according to the BIGresearch Diffusion Index (those who say they’ll spend less subtracted from those who’ll spend more). But rattled confidence in the economy and continued concerns with unemployment continue to depress the Outlook compared to Feb-08:

Retail Merchandise Categories - 90 Day Outlook
(Feb-10 compared to Jan-10, Feb-09, and Feb-08)