With the unemployment rate still nearing 10%, consumers’ outlook for future layoffs becomes more pessimistic in September…more than one in three (36.1%) currently contend there will be “more” layoffs over the next 6 months, increasing from 34.7% in August.  Just under half (45.3%) maintain that layoff levels will remain the “same,” up a point from a month ago (44.0%), while fewer than one in five (18.6%) anticipate a decline, down from 21.3% last month.  Interestingly, consumers’ personal pink slip fears remain unchanged from August, as 7.8% continue to worry for their own job security…this figure, though, is still on the rise compared to a year ago (6.7%).

With 22.4% of consumers admitting they are saving enough for future needs versus the 49.0% who say they aren’t, we know that consumers are in precarious positions when it comes to personal finances…this month, one in three (34.5%) is placing a priority on paying down debt over the next 3 months, a slight uptick from a month ago (34.0%), while just under a third (31.5%) are concentrating on decreasing overall spending.  One in four (25.4%) are anticipating increasing their savings, while 22.6% plan to pay with cash more often.

With the DJIA dipping at the start of September, investors became a bit more bearish about funding Wall Street…currently, nearly half (48.0%) of investors say they would definitely/probably invest, off almost three points from a month ago (50.9%).  Investors planning to buy stocks dip to 9.0% from 9.8% in August, while those planning to sell remain relatively flat at 4.7%.

With average prices at the pump down more than $1/gal compared to a year ago (source: AAA), more consumers seem to be basing their economic worries on other issues – i.e. the employment environment, housing market, credit crunch, etc. – instead of in their tanks…this month, 26.8% say fuel prices are having “no major impact” on spending, up ten points from a year ago (16.7%).  However, among the nearly three-quarters of consumers still affected by petrol pricing, dining out (38.0%), vacationing (37.5%), and apparel (34.1%) are the top three categories targeted for spending cutbacks.

With the summer driving season set in park at the conclusion of Labor Day weekend,  fewer consumers are anticipating rises in pump prices at Halloween…just two in five (41.3%) contend that gas prices will rise by the end of October, about half (49.2%) say they’ll remain the same, while one in ten (9.5%) predict a decline.  Drivers are expecting an average price of $2.85/gal on Fright Night, down from the $3.00/gal estimated on Labor Day.
 

All eyes are on consumers (and their wallets) as we head into the critical holiday retail season, and an advance look at consumers’ spending plans indicates that retailers should submit wish lists for stellar sales to the North Pole ASAP…a paltry 3.8% of consumers plan to increase their spending on gifts this year, down from the 4.7% and 6.9% who planned to do the same one and two years ago, respectively.  Nearly a third (29.1%) plan to spend the same, compared to 31.4% in ’08 (37.4% in ’07), while two in five (39.9%) are budgeting less for gifts, up from 39.0% a year ago and rising nine points from ’07 (30.9%).  One-fifth (22.3%) say it’s still too early to know.  So who are this year's “Big Spenders” and “Penny Pinchers”?  A snapshot look tells us that those planning to spend more, who are more likely to be male and younger than their "Spend Less" counterparts, are also quite confident in the economy as well as their jobs and their finances:

With budget-minded consumers becoming increasingly savvy when it comes to stretching their dollars, it should come as no surprise that the vast majority of consumers (89.4%) hit the ‘net to research products online before buying them in a store.  Electronics (37.2%) is the top subject of inquiry, followed by Apparel (22.2%), Appliances (19.4%), Shoes (18.0%), and Home Improvement (17.4%).  One in five consumers (23.9%) do their homework on Google.com…Amazon.com (9.9%) and Yahoo.com (5.1%) are also popular research sites.

When it comes to committing to an online purchase, consumers surf to Walmart.com and Amazon.com most often for Apparel and Non-Apparel purchases, respectively.  Bargain-hunters’ mecca – eBay.com – also places in the Top 5 for each category:

With Walmart.com topping consumers’ online Apparel list, it should comes as no surprise that the discount giant is equally fashionable in Women’s Clothing…13.2% shop Walmart most often, up more than a point from a year ago (11.7%).  Kohl’s (9.8%) places second, rising two points from September ’08 (8.0%), while JC Penney (6.8%), Macy’s (5.1%), and Target (2.5%) round out the Top 5.

The discounter proves even more popular in the Men’s Section…17.6% shop Walmart most often in this category, improving from 15.3% a year ago.  Kohl’s (9.4%) is again in second position, with JC Penney (8.6%), Macy’s (5.0%), and Sears (3.1%) rounding out the Top 5.

One year ago, Payless (with 11.2%) tracked ahead of Walmart (10.8%) in Shoes…however roles have now reversed with the big W (12.4%) leading the discount specialty (11.1%) by more than a point.  Kohl’s (5.3%), JC Penney (3.1%), and DSW (3.0%) continue to follow not-so-closely behind.

The best bet in Electronics still proves to be Best Buy…more than a third of consumers (34.7%) shop the big box most often, followed by the substantial share who shop Walmart most often (22.6%).  With much weaker consumer shares, Target (2.5%), Sears (2.3%), and Amazon.com (2.1%) complete the Top 5.

The big discounter and a different big box are playing hardball in Sporting Goods/Exercise Equipment…Walmart leads this category with 16.8% shopping there most often, while Dick’s follows with 12.0%.  Sports Authority (4.5%), Big 5 (3.3%), and Academy (3.1%) round out the Top 5.  Price (53.4%) leads as the top reason to shop a particular store for Sporting Goods…location (35.9%) and selection (35.6%) follow.

In your bracket for Sporting Goods, it’ll be a safe bet to leave Walmart and Dick’s as your top 2 seeds for customer choice…according to this month’s Consumer Migration Index (CMI), which tracks those who have immigrated to a store (new customers in the past year) against those who have emigrated (left within the past year), and where a positive rating spells net growth to a retailer, both Walmart and Dick’s are gaining new customers with +4.2 and +6.4 CMI ratings, respectively, while Sports Authority (-2.2), Big 5 (-1.4), and Sears (-1.4) are experiencing customer deficits:

Not surprisingly, high prices (15.7%) played a primary role in migration to an alternate shop for Sporting Goods…inconvenient location (10.9%), lack of newest styles (6.3%), decline of store appearance (4.3%), and poor selection (4.1%) were also key players.

Two big boxes continue to hold a monopoly on the Home Improvement block…Home Depot (29.9%) and Lowe’s (25.5%) lead here, while Walmart (7.2%), Menards (4.0%), and ACE (3.2%) follow.

Walmart continues to best traditional grocers in the foodstuffs aisle…the big discounter leads with 17.7% filling their pantries here most often…Kroger (6.7%), Publix (3.6%), Safeway (2.9%), and Meijer (2.2%) complete the Top 5.

With one in three (31.1%) shopping there most often, Walmart maintains its substantial share margin in Health & Beauty Care…druggists CVS (8.1%) and Walgreens (7.9%) follow, while Target (6.5%) and Rite Aid (3.0%) round out the Top 5.

However, it’s the druggists with the cure in Prescription Drugs…Walgreens (16.3%) and CVS (14.1%) are tops in this category, while Walmart (11.2%), Rite Aid (6.1%), and Target (2.6%) trail.
 

While the holiday season is on the horizon, the shopping spirit continues to be dampened by financial and economic turmoil, according to the BIGresearch Diffusion Index (those who say they’ll spend less subtracted from those who’ll spend more).  While popular gifting categories like Electronics, CDs/DVDs, and Toys improved from August, all categories declined from September ’08, a not-so-jolly forecast of consumers’ intent to spend in the coming months.

Retail Merchandise Categories - 90 Day Outlook
(Sep-09 compared to Aug-09 and Sep-08)

While TV purchase intentions provided a much-needed silver lining during Holiday Season ’08, it doesn’t currently appear that a similar high dollar durable will prove popular with consumers in ’09, as six month purchase intentions decline (computer, furniture, jewelry/watch, home improvements, stereo equipment, TV) or remain flat (auto, house, RV/boat, DVD/VCR, digital camera) for most categories.  Vacation travel is up slightly, while the home appliances category has improved nearly a point from a year ago…’tis the season for a new dishwasher.
 

What’s Hot…Not

Consumers get back to basics in September…Farmers Markets are what’s hot this month (according to 70.5%)…early holiday shopping (49.5%) is also on trend.  America’s Got Talent and county fairs are a hit with the female crowd, while college football scores with men.  What’s Not? While retailers are pushing this fall fashion, consumers just aren’t buying gray denim.

Sincerely,

                                                                 

 Editor

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