With the U.S. unemployment rate continuing to grow, consumers seem divided about its future direction, as the groups who expect “more” and “fewer” layoffs in the next six months both rise from October…this month, more than a third (36.2%) expect layoff levels to increase, up from 34.6% last month, but vastly improving from November ’08 (59.4%). Two in five (43.7%) contend that the layoff rate will remain the “same,” down from 47.0% in October, while one in five (20.1%) hopes for “fewer” (v. 18.5% last month).

Personal concerns with becoming laid off remain flat from October at an encouraging 4.7%, falling 40%+ from the figure recorded a year ago (8.2%).

Here’s some news retailers can give “Thanks” for: consumers are relaxing their focus on financials in November…while “pay down debt” remains the most popular plan over the next three months, fewer (32.6%) are planning to do so compared to one month (34.7%) and one year (36.3%) ago. Those planning to decrease overall spending (30.4%) is also on the decline from October (33.7%) as well as November ’08 (35.5%). Intent to increase savings (24.0%) and pay with cash more often (21.1%) additionally weakens from the previous month and year.

However, look for fiscal conservatism to resurge once the holiday shopping has been completed…with nearly half (46.9%) indicating they are “worse off” financially compared to a year ago, consumers are still cognizant of the recession’s impact on their bank accounts:

With the DJIA topping 10K in early November, investors retain their bullish outlooks…this month, more than half (51.8%) of investors say they would definitely/probably gamble in the stock market, on par with October (52.1%). Over the next three months, 8.7% of investors plan to buy stocks, dipping slightly from 10.2% in October, while 4.4% plan to sell, down from 5.1% last month.

It’s a good thing Santa’s sleigh is fueled by reindeer…cautious consumers are aware of the upward direction of pump prices in recent weeks, perhaps anxious that a gas Grinch may steal Christmas [budgets] this year…seven in ten (68.0%) contend in November that gas prices will continue to rise through December 25. About a third (28.6%) expects the cost of fueling up to remain the same, while the vast minority (3.4%) calls for a decrease. Drivers predict an average pump price of $3.05/gal on Christmas Day, up $0.40 from the current $2.65/gal national average (source: AAA).
 

With the recession having many consumers on tight apparel budgets lately, high hopes on holiday wish lists and pent up demand appear to be driving consumers’ penchant for familiar fashion labels, as 46.5% say these are important when buying clothing, up nearly five points from those who said the same a month ago (41.8%). Signs of troubling times are still evident…this figure remains below the November ’08 (47.0%) and ’07 (47.5%) readings.

While consumers tend to shop department stores (28.7%) over discounters (20.8%) and specialty shops (13.7%) for Women’s Clothing, one big discounter continues to shine, specifically speaking…more than one in ten (11.9%) shop Walmart most often, rising about a point from a year ago (11.0%), while Kohl’s (9.6%) finishes second, gaining similarly from the previous year (8.6%). JC Penney (7.2%), Macy’s (6.2%), and Target (2.5%) round out the Top 5.

Walmart’s lead is even stronger in the Men’s section, where 14.9% shop the discounter most often…Kohl’s and JC Penney follow with 8.8% and 8.6%, respectively, while Macy’s (5.2%) and Sears (2.8%) complete the Top 5.

And with three times the share of its nearest competitor in Children’s, Walmart completes the triple crown in clothing…the Bentonville behemoth leads with 14.8% shopping there most often, while Kohl’s (4.8%), Target (4.5%), JC Penney (4.2%), and Old Navy (2.0%) follow.

Have designer offerings and the ever present BOGO deals piqued consumers’ interest in Payless? For the first time in 10 months, the discount specialty (with 10.7% shopping there most often) has landed ahead of big discounter Walmart (10.3%) in Shoes. The complete Top 5: 1. Payless (10.7%), 2. Walmart (10.3%), Kohl’s (4.7%), 4. DSW (3.4%), 5. JC Penney (3.1%).

With the majority of shoppers headed to Best Buy (33.2%) or Walmart (19.8%) for Electronics, look for these retailers to be hot holiday destinations for popular gifts like TVs, cell phones, and video games. Target (2.5%), Amazon.com (2.4%), and Sears (1.8%) follow not-so-closely behind.

Walmart and Dick’s continue as the heavy hitters in Sporting Goods, with 13.0% and 11.0% shopping most often, respectively. Next up to bat are Sports Authority (4.0%), Academy (3.2%), and Big 5 (2.3%).

On the softer side, Walmart commands a growing lead in Linens/Bedding/Draperies with 17.5% shopping there most often, rising a point from a year ago (16.5%)…Bed Bath & Beyond follows with 12.8%, off nearly a point from November ’08 (13.6%). JC Penney (7.5%), Target (5.4%), and Kohl’s (3.3%) complete the Top 5.

For Thanksgiving turkeys and all of the trimmings, look for many to head to Walmart, where 18.1% shop the discounter most often for Groceries…traditional grocers Kroger (6.6%), Publix (4.0%), and Safeway (2.8%) continue to trail the big W…Meijer finished fifth with 2.3%.

Interest in Organics continues with three in five shoppers (62.5%) reporting that they regularly or occasionally shop for these products…produce (51.9%), breads (30.5%), cereals (28.4%), dairy (28.0%), and juices (27.7%) are among the most popular products in green shoppers’ carts. One in ten (10.2%) organic-oriented consumers shop Walmart most often, while Whole Foods (8.1%), Trader Joe’s (5.7%), and Kroger (4.6%) are also top shops.

With seven in ten (68.7%) selecting price as the top reason to shop a particular store for Health & Beauty Care, it should come as no surprise that the EDLP purveyor – Walmart – continues to trump the competition with 32.2%...druggists CVS (8.7%) and Walgreens (8.2%) follow, while Target (6.6%) and Rite Aid (3.0%) complete the Top 5. Location (49.8%), selection (45.4%), quality (23.1%), and 24 hour convenience (15.4%) follow as top reasons to shop.

With a secure 20+ point spread between Walmart and its nearest HBC competitors, the big discounter isn’t likely to be dethroned from this category anytime soon. However, according to this month’s Consumer Migration Index (CMI), the druggists are positioning themselves for future gains…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 while Walmart has experienced a slight deficit with a -0.6 CMI, Walgreens and CVS have grown their new customer base with +4.2 and +3.2 CMI ratings, respectively:

What prompted migrating HBC shoppers to switch stores? These consumers cited high prices (21.9%), inconvenient location (17.7%), decline of store appearance (8.0%), poor customer service (6.6%), and long check-out lines (6.5%) as top culprits.

Corner drug stores continue to have a lock on the Prescription Drug segment…Walgreens and CVS lead this category with 15.7% and 14.7% shopping most often, respectively. Walmart is a strong third place contender among 10.8%, while Rite Aid (5.5%) and Target (2.4%) follow.
 

Consumers opt to keep retailers guessing, as the 90 Day Outlook produces mixed results in November…according to the BIGresearch Diffusion Index (those who say they’ll spend less subtracted from those who’ll spend more), while several categories have improved from one year ago, nearly all have failed to improve from last month as well as November ’07, indicating that the economic Grinch is still keeping a tight clamp on consumers’ wallets:

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

Will we find netbooks and blenders under the tree this year? While the 90 Day Outlook doesn’t provide completely positive news for retailers, one can find a few bright spots among high-dollar durables: computers and home appliances. Six month purchase intentions have risen over the past year for these two categories, while other items have remained flat (autos, RV/boat, stereo equipment, DVD/VCR, vacation travel) or declined (furniture, jewelry, digital camera). Last year’s high-dollar darling – the TV – has slipped for Holiday ’09…in ’08, 12.0% planned to make this purchase, compared to a current 10.1%.
 

What’s Hot…Not

This month, it’s old school over New Moon in the search for What’s Hot for November…with 48.7% voting it “hot,” seven-year old TV show NCIS bested the second installment of the Twilight saga, New Moon (38.7%). Black Friday shopping (48.0%) and Michael Jackson’s This Is It (44.5%) also proved popular. Additionally, Conan O’Brien can count young men among his fans, while their female counterparts say Taylor Swift hits a high note. What’s Not? 80% contend that Lace Tights just shouldn’t be seen in public.
 

Sincerely,

                                                                 

 Editor

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