SOME SHOPPERS COME BACK, BUT AVOID MAJOR PURCHASES
Summertime is calling some consumers back into the retail marketplace, but so far they are only buying small-ticket items they absolutely need rather than larger products that they want.
The latest Consumer Mind Reader ™ survey from America’s Research Group and UBS showed improvement in a number of retail categories over last summer, but the gains were modest.
Like Puxatony Phil on Groundhog Day, shoppers are cautiously sampling the retail environment in an attempt to determine what their economic future will be. They are obviously restless, and the pent up demand among consumers continues to grow. At some point they are forced to replace old and worn out necessities like apparel and appliances. Likewise they need to repair autos and homes that might have been neglected for a year or more. Growth among discount stores, which would logically be the beneficiaries of a sluggish economy, remained flat. While the discount giants like Wal-Mart and Target continued to draw customers, their average spending levels were greatly reduced.
The Consumer Mind Reader survey tracks the shopping habits of 1,000 American consumers for the previous month. The greatest retail casualties in the survey, which was conducted immediately following the July 4th holiday weekend, were major department stores and sporting goods stores. These categories suffered significant declines in both store traffic and average spending levels over the same time period in 2009. And remember that last summer the recession was in full swing so those statistics were already down from previous totals.
The sounds of silence echoed throughout most of the retail community this summer. Categories showing some improvement were topped by discount apparel stores and membership warehouse clubs. They showed modest improvement in both number of shoppers and average purchases.
Consumers are clearly frustrated the longer a turnaround is delayed. They hear Washington politicians tell them the recovery is in full swing, but they have seen no evidence of it where they live. They are tired of months of belt tightening, but are not willing to mortgage their future by excessive credit card spending.
The overall result is a retail stalemate leaving retailers to hope the fall and vital Christmas seasons will salvage their bottom line for the year.
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 available at bookstores nationwide. More detailed information is available on the America's Research Group website at www.americasresearchgroup.com. UBS Global Equity Research provides the broad global perspective and in-depth analysis that institutional investors need to make good investment decisions. With more than 600 analysts, associates, strategists and economists in EMEA, APAC and the Americas, UBS covers approximately 85% of the world market capitalization - over 3,300 companies worldwide across 46 different markets. In addition to UBS's disciplined fundamental research, clients also rely on UBS for corporate and expert access to give them the insight they need, when they need it.