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Fresh Economic, Retail & Consumer Insights
for Shopper Understanding
Edited and Produced by BIGresearch…Providing Unique
Insights Each Month from the Consumer Intentions & Actions Survey.
October 2008
(Respondents Surveyed 9/30 – 10/07/08)
SPECIAL
EDITION: VIDEO BRIEFING
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This special "video" edition includes a video briefing
which recaps the key consumer insights for the month of October.
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This newsletter summarizes the pulse of the consumers based on
BIGresearch’s monthly national Consumer Intentions and Actions (CIA)
Survey every month. The CIA survey findings are available by shoppers
of most major retailers and can be licensed and delivered via
electronic download. For more information on the CIA, click
here.
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Consumers opt for
the trick over treat
for October’s
confidence reading…this
month, those very
confident/confident
in chances for a
strong economy drops
nine points to
19.0%, erasing gains
of almost five
points per month in
August (23.6%) and
September (28.3%).
October’s teen
reading represents a
25+ drop from one
year ago (44.8%)
and, heading into a
critical holiday
season, the first
September-to-October
decline in
confidence since
2004 (which saw a
relatively
inconsequential
45.6% to 44.3%
decrease that
rebounded in
November).
Bank busts,
election-fueled
backbiting, and the
downhill slide on
Wall Street have
Main Street-ers’
concern about
political and
national security
issues reaching a
fever pitch…in
October, about one
in three (30.8%)
continue to worry,
up from 25.8% last
month, 17.4% one
year ago, and the
highest reading
since April 2003
(35.9%).
Retailers are hoping
to weather the storm
forecasted for the
Q4 selling season,
but consumers have
yet to find the
holiday spirit…more
than half (51.7%)
indicate this month
that they’ve become
more practical in
purchasing, rising
from 49.4% last
month, 38.6% last
year, and a new
high. So it appears
that many will be
opting for cotton
over cashmere and
sterling over
platinum when it
comes to bagging
perfect gifts this
year.
It may take some
savvy letter-writing
to Santa in order to
procure the latest
and greatest toys
and games…with
close to four in
five (57.8%)
emphasizing needs
over wants in
purchasing, it
appears that a
number of shoppers
will be headed to
stores just for the
staples in the
near-term…this
figure increases
almost two points
from September
(56.1%) and a
whopping 10+ points
from October ’07.
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Sliding confidence
coupled with the
banking crisis,
credit crunch, and
foreclosure fallout
breed record
pessimism for the
employment outlook…in
October, four in
five (63.5%)
indicate they expect
“more” layoffs in
the next 6 months,
rising from 45.7%
last month and a new
high. Fewer than
one in three (29.6%)
contend layoff
levels will remain
stable (v. 44.3%
last month), while
an optimistic
minority (6.9%) hope
for a decrease,
dropping from 10.0%
in September.
Personal fears of
the pink slip are on
the rise as
well…7.5% reveal
they worry about
becoming laid off,
up from 6.7% last
month and the
highest reading
since May ’02
(8.3%).
While many are
blowing their
budgets feeding
their fuel tanks and
their families,
consumers remain
vigilant about also
nourishing their
bank accounts…almost
two in five (38.1%)
contend that they
intend on decreasing
overall spending, up
10 points from last
year (28.4%) and not
good news to
retailers, as this
is the highest
recorded reading
heading into a
holiday season…36.2%
plan to pay down
debt (v. 34.9% in
October ’07).
Increasing savings
(27.5%) and paying
with cash more often
(25.5%) also rise
from 26.4% and
21.3%, respectively,
over the past year.
With the Dow
recently sinking
below 10K, investor
confidence has
soured, but a few
bulls remain…two
in five (42.2%)
investors say they
would
definitely/probably
invest in the stock
market, down more
than 10 points from
a month ago
(53.7%). One in ten
investors (10.3%)
remains ready to
buy, flat from
September, while
5.3% plan to sell,
declining slightly
from 5.6% last
month.
While dropping
demand has consumers
paying relatively
less at the pump
these days, drivers
continue to keep the
brake on spending…almost
half (48.1%) contend
they continue to
take fewer shopping
trips, while 44.2%
shop closer to home
and 34.9% are
increasingly relying
on coupons…how does
this compare to
shoppers circa
2007? Take a look
below:

Although pump prices
are on the decline,
it appears that the
dismal forecast on
the economic front
have consumers wary
about the longevity
of this downward
trend…two
in five (42.8%)
predict that gas
prices will rise by
Thanksgiving, up
from the 34.0% who
felt the same come
Halloween. 39.7%
contend gas prices
will stabilize,
while one in five
(17.6%) are
optimistic about a
continued decline.
The Turkey Day
forecast is
$3.76/gal, up only
marginally from the
$3.73 brewed up for
Fright Night.
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While
consumers
are looking
to curb
overall
spending,
that hasn’t
meant
similar
cutbacks in
their sense
of style…18.5%
contend they
crave newest
fashion
trends and
styles, up
almost five
points from
a year ago
(14.0%).
Almost half
(47.0%)
indicate
that value
and comfort
dictate
their
wardrobes,
down from
50.2% in
October ’07,
while 34.5%
take a
traditional,
conservative
approach to
attire (v.
35.8% in
’07).
Budget-conscious
consumers
continue to
head to
Wal-Mart
most often
for Women’s
Clothing…11.4%
shop the
discounter
(down half a
point from
October
’07),
followed
relatively
closely by
cheap-chic
purveyor
Kohl’s
(8.6%),
who’s up
from 8.2%
one year
ago. Macy’s
(7.8%) jumps
JC Penney
(6.9%) for
third, while
Target
(2.7%)
rounds out
the Top 5.
It appears
that Macy’s
made its big
gain in
Women’s
Clothing
with loyalty
among
fashion-conscious
shoppers…15.8%
who follow
newest
trends and
styles shop
the
department
star most
often,
followed
weakly by
Kohl’s
(6.6%)...Wal-Mart
maintains
higher
concentrations
of
value/comfort
and
traditionally
styled
shoppers.
Take a sneak
peek at our
October
Retail
Ratings
Report for
Women’s
Clothing for
a clear
view:
www.bigresearch.com/big-cias-rrr-oct08-womens.pdf.
To learn
more about
the Retail
Ratings
Reports,
which are
available
for 12 major
categories,
call
1-800-800-4462
or visit us
on the web
at
www.BIGresearch.com.
Wal-Mart’s
at the
forefront
for Men’s
Clothing
shoppers as
well…14.1%
shop the big
discounter
most often,
followed by
Kohl’s
(8.7%), JC
Penney
(8.0%),
Macy’s
(6.5%), and
Sears
(3.4%).
With almost
half (48.9%)
opting for a
particular
tot shop
based on
price,
discounter
Wal-Mart
completes
the apparel
trifecta
with the
lead (13.5%)
in
Children’s
Clothing as
well, more
than double
the share of
nearest
competitor,
Kohl’s
(5.4%).
Target
(5.3%), JC
Penney
(4.1%), and
Gap (2.8%)
complete the
Top 5.
Selection
(34.8%),
quality
(27.9%),
location
(24.6%), and
good size
selection
(20.7%)
follow price
as top
reasons to
shop.
Though is
Wal-Mart
continuing
to court
Children’s
consumers?
According to
the October
Consumer
Migration
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,
confirms
that
Wal-Mart
will likely
continue to
rule the
kid’s
kingdom with
positive 1.2
CMI
rating…fellow
discounter
Target also
gains
(+2.5%),
while Sears
(-1.7) and
JC Penney
(-0.9) face
customer
deficits:

It appears
that
discount
pricing and
one-stop-shopping
convenience
may be
boosting
Wal-Mart and
Target’s
customer
base…high
prices
(14.6%) and
inconvenient
location
(9.4%) were
cited as top
reasons to
stop
shopping a
particular
Children’s
Clothing
store. Poor
selection
(7.2%),
decline of
store
appearance
(4.9%), and
poor
customer
service
(4.5%)
followed.
Wal-Mart
gets its
stride back
in Shoes
this month…after
two
consecutive
months of
finishing
second to
Payless, the
big
discounter
leads the
discount
specialty
with 10.9%
shopping
there most
often to
10.1%.
Kohl’s
(4.5%),
Macy’s
(2.7%), and
JC Penney &
DSW (tied,
with 2.6%
each) round
out the Top
5.
Wal-Mart and
Bed Bath &
Beyond
continue to
strengthen
in the home
softlines
segment…the
big
discounter
(16.2%)
continues to
lead the big
box (12.3%)
in
Linens/Bedding/Draperies,
though both
retailers
improve from
’07 (15.9%
and 10.3%,
respectively).
JC Penney
(6.7%),
Target
(5.5%), and
Linens ‘N
Things
(5.0%)
complete the
Top 5.
While
budget-and-practical-minded
holiday
shoppers may
be opting
for video
games,
movies, and
other
accessories
over the
latest
players and
gaming
consoles
this season,
where can we
still expect
them to head
for these
Electronics
“needs”?
Best Buy
remains tops
in this
category,
with almost
one in three
(30.9%)
shopping
there most
often…Wal-Mart
remains a
relatively
strong
competitor
(16.7%),
while
Circuit City
(6.8%),
Target
(2.5%), and
Sears (2.0%)
round out
the Top 5.
While
Grocery
shoppers in
general tend
to head to
grocers
(50.5%) more
often than
discounters
(19.1%),
Wal-Mart’s
got the
national
edge on its
regional-minded
competition,
leading this
category
with 16.1%.
Grocers
Kroger
(6.0%),
Publix
(4.0%),
Safeway
(2.7%), and
Stop ‘n Shop
& Shoprite
(tied, with
2.1% each)
follow
not-so-closely
behind.
Wal-Mart
continues
its clean
sweep in the
Health &
Beauty Aisle
as well,
leading with
26.8%
shopping
there most
often for
soaps,
shampoos,
and
cosmetics
and gaining
from 25.5%
in October
‘07. CVS
(9.0%),
Walgreens
(7.8%),
Target
(6.1%), and
Rite Aid
(2.7%)
continue to
trail the
Bentonville
behemoth.
Druggists
continue to
hold the
cure for
consumers in
Prescription
Drugs…Walgreens
(15.1%) and
CVS (14.2%)
lead this
category,
while
Wal-Mart
remains in
third
position
(9.6%).
Rite Aid
(5.7%) and
Target
(2.1%)
complete the
Top 5.
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October
gives us two reasons to grab our coats: (1) there’s a chill in the air and (2) we’re headed down the
Frozen Food Aisle…Wal-Mart’s dominance in the Grocery category is
evident for these foodstuffs, as 15.7% shop the discounter most
often for frosted veggies, pizza, and entrees…Kroger is a distant
second with 5.5%, while Publix (3.3%), Safeway (2.3%), and Costco
(2.0%) round out the Top 5.
While
organic produce and farmer’s markets are gaining recognition from
the general public,
the frozen food shoppers buy most often remains vegetables (58.5%
buy at least 2-3 times per month). Chicken & turkey (42.5%), juice
(42.2%), dinner entrees (41.6%), and ice cream/frozen yogurt (40.4%)
are also among the most frequently purchased frozen foods.
While
three in four (74.7%) frozen food shoppers agree/strongly agree that
these products are arranged in an easy to shop manner, about half (54.3%) still regularly or
occasionally have trouble finding the items they want to buy…why?
33.2% of these shoppers say they have difficulty finding the exact
product form they want, 25.9% have trouble finding the types of
products they need, 24.9% complain of stock-outs, 22.9% can’t locate
the right brand, while 19.5% indicate the store doesn’t carry the
item they want to buy.
Overall,
though, it appears that shoppers are generally pleased with their
frosty shopping experiences…91.7% assert that they would recommend the store they shop most
often for frozen foods to others.
About
$32 of monthly grocery budgets are allocated to frozen food
products…households
earning $50,000+ per year tend to spend a little more ($35) than
those earning under $50,000 ($29). Men also tend to spend a little
more in this aisle ($33) compared to the fairer gender ($31).
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Increasingly pessimistic consumers brew a downright spooky 90
Day Outlook,
according to the BIGresearch Diffusion Index (those who say
they’ll spend less subtracted from those who will spend more).
With Toys the lone improver from September and all categories
declining from October ‘07, it appears that retailers heading
into holiday ’08 selling season might need to send an SOS to
Santa to help turn these grinches into givers:
Retail Merchandise
Categories - 90 Day Outlook
(October 08 compared to September 08 and
October 07)
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Category
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September 08
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October 07
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Category
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September 08
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October 07
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Children's
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DOWN
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DOWN
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Toys and Games
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UP
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DOWN
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Women's Dress
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DOWN |
DOWN
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CDs/DVDs/Videos/Books
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DOWN
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DOWN
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Women's Casual
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DOWN
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DOWN
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Electronics
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DOWN
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DOWN
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Men's Dress
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DOWN
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DOWN
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Groceries
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DOWN
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DOWN
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Men's Casual
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DOWN
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DOWN
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Home Improvement
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DOWN
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DOWN
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Shoes
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DOWN
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DOWN
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Lawn & Garden
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DOWN
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DOWN |
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HBC
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DOWN
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DOWN
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Home Furniture
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DOWN
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DOWN
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Dining Out
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DOWN
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DOWN
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Decorative Home Furnishings
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DOWN
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DOWN
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Sporting Goods
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DOWN
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DOWN
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Linens/Bedding/Draperies
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DOWN
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DOWN
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Six month purchase intentions for high
dollar durables hold some hope for retailers
looking to end Q4 in the black this year…compared
to last month, all categories either improve
(autos, computer, appliances, housing,
jewelry/watch, major home improvements,
stereo equipment, DVD/VCR, digital camera)
or remain relatively flat (furniture,
RV/boat, vacation travel). While most
categories declined from October ’07, two
bright spots remain…purchase intentions rose
for computers (12.5% plan to purchase) and
TVs (11.6%).
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With the historic Presidential election on the horizon,
more than eight in ten (84.0%) consumers agree…registering to vote
is what’s hot this month! Also on the election front, Sarah Palin
bests Joe Biden in the “popular” vote for next VP. It’s renting
movies over going to the theater, and bold necklaces are making a
statement with women, while the MLB playoffs are a hit with men.
What’s Not? Unless you’re a lumberjack by trade, it’s best to keep
your flannel behind closed closet doors.
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