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GAS PRICES TAKE THEIR TOLL ON RETAILERS
The summer of retail discontent plows on as consumers are forced to cut back on discretionary spending habits because of high prices at the gas pumps.
Retailers of furniture, sporting goods and jewelry were especially hard hit by the ongoing slump in retail spending, according to the latest Consumer Mind Reader® survey of retail shopping habits nationwide conducted by America's Research Group.
Fewer than half the consumers interviewed bought furniture in the last month as compared with July of last year. Jewelry stores saw only 57 percent of the number of shoppers as compared with 2007 totals, and sporting goods retailers saw their store traffic fall by a third.
With the national gas price average approaching $4.15 a gallon, consumers have no choice but to tighten their belts and cut back on spending. Lifestyles are changing, with American consumers forced to cut back on their vacation plans or simply stay home this summer. The changes are also reflected in any trips they take in the family car, with more planning ahead of time to maximize gas efficiency.
If there are any retail beneficiaries of this crisis, it may be the neighborhood stores which are closer to where people live. Having been the victims of the popularity of big box retailers and shopping malls for years, stores closer neighborhoods may be able to regain lost customers if gas prices stay high.
Neighborhood hardware stores saw an increase in traffic during the last month of summer shopping, along with home improvement stores as consumers are forced to make their own home repairs and renovations rather than turn to outside contractors.
Between the trauma on Wall Street, troubling times in the financial industry, the uncertainty of the Presidential election and the added burden of high gas prices, it's not surprising that consumers are spending cautiously and only out of necessity. The current economic conditions create a real dilemma for retailers, who are themselves facing higher costs in shipping and delivery of their products to their stores.
One thing is for sure and certain. Consumers are now, more than ever, cost conscious and retailers will have to meet their expectations if they are to move their products.
Britt Beemer, founder and chairman of America's Research Group, is the country’s leading authority on retail buying habits of consumers. ARG tracks consumer buying habits more than any other survey research firm in the nation. The company conducts customized surveys for retail and manufacturing clients across the United States, designed to provide clients valuable marketing recommendations to grow their businesses. Beemer is author of two best-selling business books, Predatory Marketing and It Takes a Prophet to Make a Profit. His third business book, entitled The Customer Rules, is due out in September, 2008. More detailed information is available on the America’s Research Group website at www.americasresearchgroup.com