June Insights – Hot Off the Press!

Early each month, we release our Executive Briefing – complimentary topline insights from our latest Monthly Consumer Survey of more than 8,000 consumers.

Click to view this month’s Executive Briefing

And, we’ve just released our latest edition for June. Here’s what you may have missed:

– As the summer weather heats up, confidence in the economy cools off. This month, just 31.3% feels very confident/confident in chances for a strong economy, down from last month and marking the second consecutive month of decline for this indicator.
– Good luck, Class of 2012: With the official U.S. unemployment remaining a discouraging 8.2%, an increasing number of consumers foresee a rise in layoffs over the next six months compared to May.
– May’s dip in practicality appears to have been just a “blip” on consumers’ spending radar. Additionally, practicality remains elevated from the June readings we recorded during the recession, suggesting that fault lines in the macro-economy are still rattling spending plans on a micro level.
– Pain at the Pump: No gas price “fireworks” expected to set off for upcoming the holiday. Drivers are anticipating an average pump price of $3.75/gal by the end of June, 20 cents lower than their prediction for the close of May.
– Walmart wins in Women’s Clothing, while JC Penney is slipping.
– Consumer Migration: While Walmart’s travails are well-documented in Women’s Clothing, does the big discounter’s outlook look any brighter over in Men’s section?
– 90 Day Outlook is looking UPward compared to the past two years.  However, with spending for the majority of merchandise categories weakening compared to May, look for practical consumers to continue to exercise caution when spending.
– What’s Hot? Saving is in style, with Coupons taking the top spot in our list of What’s Hot for June. [#attentionJCP]

To sign up to receive the monthly BIGinsight™ Executive Briefing, please click here.

And, to view the latest BIG Executive Briefing in its entirely: June 2012.

Source: BIGinsight™ Monthly Consumer Survey – JUN-12 (N = 8760, 6/5 – 6/12/12)

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

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Have You Been Briefed for May?

Early each month, we release our Executive Briefing – complimentary topline insights from our latest Monthly Consumer Survey of more than 8,000 consumers.

Click to view this month’s Executive Briefing

Yesterday marked the release of our edition for May. Here’s what you may have missed:

– The bloom is off the rose for Consumer Confidence…we saw signs of dampening sentiment in April (when confidence flatlined after five consecutive months of improvement), but sentiment for the economy declined two points from last month.

– Nearly half maintains a penchant toward pragmatic spending, but this has declined four points from April. This figure remains elevated from May-11 and May-10, suggesting that market uncertainties (unemployment, gas prices, economic health, etc.) are still influencing spending.

– While plans to decrease overall spending have lowered from the extreme we saw in April, cutting back remains at the fiscal forefront.

– Drivers are anticipating an average price of $3.95/gal as we approach Memorial Day, lowering from the $4.17/gal expected at the end of April. Despite the recent declines in the cost of fueling up, the vast majority of consumers say their spending in other areas is still impacted by prices at the pump.

– The Women’s Clothing battle is too close to call this month…after three consecutive turns as the leader in this category, Kohl’s shares the top spot with Walmart in May.

– Are there cracks in Home Depot’s foundation? We examine the big builder and its competition in this month’s Consumer Migration Index.

– Is Mom in for a treat on May 13? Six month purchase intentions are on the rise for all on our BIG Tickets items this month compared to May-11. A Mother’s Day favorite – Jewelry – is up 30%+ from last year.

– Move over Iron Man…Marvel’s The Avengers is no match for our favorite nonagenarian.

To sign up to receive the monthly BIGinsight™ Executive Briefing, please click here.

And, to view the latest BIG Executive Briefing in its entirety: May 2012.

Source: BIGinsight™ Monthly Consumer Survey – MAY-12 (N = 8789, 5/2 – 5/8/12)

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

Why Are Shoppers So Glum About Spending?

As we recently reported in our April BIG Executive Briefing, two in five consumers (39.8%) say they plan to decrease overall spending over the next three months…that was April’s top financial priority, dethroning the usual intent to pay down debt (34.7% in Apr-12).

Forty percent actively attempting to curtail their expenditures is a big number. So big, in fact, that we’ve only approached this figure three times in the past SEVEN years. Researching this a bit further, it was pretty easy to tie a piece of history to each of the three previous peaks: Hurricane Katrina, the Summer ’08 Record High Gas Prices, and Holiday ’08 (see chart below, but don’t strain your brain…I’ll break it down in a second). Because two of these three events had at least a little something to do with pump prices, I added in the average price per gallon of gas during the week of our survey collection, as reported by the U.S. Energy Information Administration.

Now, let’s break this down historically:

Hurricane Katrina: When this natural disaster slammed into the Gulf states in Aug-05, we were all affected nationwide. New Orleans, et al were literally adrift, slow response times left victims with prolonged suffering [*coughs* FEMA], and price per gallon of gas soared to $3 [ah, $3/gal…how I miss thee]. By September, consumers were responding with their spending sentiment: 40.0% were planning to decrease overall expenditures. As you can see in the chart though, as pump prices edged back downward, consumers backed off this conservative fiscal mantra.

Summer ’08 Gas Price Highs: According to the AAA Daily Fuel Gauge Report, pump prices hit an all-time high on July 17, 2008, at $4.114/gal. By now we were also in the belly of the recession, and 39.2% of consumers reacted with plans for spending cutbacks. And though gas prices bottomed-out by Holiday 2008, consumer spending plans didn’t respond in kind #thankyoubankfailures

Holiday ’08: It’s safe to say that the Holiday 2008 shopping season was a disaster. The severe spending cutbacks that materialized with shoppers were not anticipated by retailers, who were left deeply discounting the massive amounts left on their store shelves pre- and post-holiday. More than two in five consumers (42.9%) rang in New Year 2009 with resolutions to decrease overall spending, a record high. So – obviously – it’s not always gas prices that ignite spending cutbacks among consumers…sometimes, you can blame it on a recession.

Furthering the point that pump prices aren’t always that culprit, when the cost of fueling up topped off at over $4/gal last May, drivers didn’t have a fiscal knee-jerk reaction. While at the time consumers were bracing for a $4.25/gal price by Memorial Day ’11, that never materialized and plans to decrease overall spending continued to fluctuate in a relatively [new] “normal” 30% to 35% range.

So what’s different this year? Average gas prices have crossed that $4/gal threshold again, and 39.8% have responded with plans to cut back. Have consumers just had enough? Are they tired of dealing with pump prices in addition to the inflating price tags on apparel, food, and other household items? Are they not willing to tap into their hard-earned savings to cover the additional costs of fueling up? Are they hedging on a response [or lack thereof] from Capitol Hill?

At any rate I think it’s safe to say that if gas prices don’t cool off as summer heats up, retailers might be in for a spending drought.

For more information on this data, please contact BIGinsight™.

Like the timeline infused with BIG data? Be sure to sign up for complimentary access to our Vital Signs InsightCenter™, an advanced platform for the visualization and delivery of insights and answers on how consumers in the U.S. are reacting to key economic events. It illustrates how consumers feel about the economy, changes they make in their lives in reaction to the economic situation, and how their personal financial and spending plans are affected by key events. It goes beyond traditional point-in-time data reports to trended insights in one easy-to-use, decision-ready format.

Source: BIGinsight™ Monthly Consumer Survey – APR-12 (N = 8724, 4/3 – 4/10/12)

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

FYU: Women’s Clothing

For Your Understanding this week, let’s take a closer look at the Women’s Clothing category…

It was pretty big news this month when – for the first time in the 10 year history of our Monthly Consumer Survey – Kohl’s overtook Walmart as the store shopped most often for Women’s Clothing. Since late 2002, Kohl’s has been climbing steadily in this category, while Walmart has dropped precipitously since its early 2000s glory days:

To get a better understanding of where Walmart has been crumbling, we can turn to our latest Retail Ratings Report. Just on the first few pages of this handy guide*, we can see that:

– Walmart is out-shopped by Kohl’s, Macy’s, and JC Penney among those earning $75,000+ per year (and even among though earning $50,000+/year);
– Walmart’s sweet spot of Women’s Clothing customers earn less than $50,000 per year;
– Kohl’s trumps Walmart in the Northeast and Midwest;
– Walmart enjoys loyalty in the South, while it’s a closer call between the two retailers out West.

But let’s look a bit deeper with the Consumer Equity Index™ (CEI). The CEI – available exclusively within the Retail Ratings Reports – is a year-over-year index showing growth or decline of Consumer Preference Share (the % we collect each month for the store shopped most often). Here’s a key:

CEI = 100 (flat)
CEI = 105 (5% growth)
CEI = 95 (5% decline)

Our latest CEI ratings for Kohl’s indicate that the department store darling is growing among the general population (Adults 18+), Women, Men, those earning $50,000+/year, as well as those earning less than $50,000/year (Walmart’s core shopper group). And, while Kohl’s is climbing across the board, Walmart is declining in each of these groups. A graphical representation of the CEI for the top five retailers in Women’s Clothing (among female shoppers):

Here, we can see that Walmart is experiencing a 6% decline with Women, while Kohl’s is growing 4.5%. Among the top five retailers, JC Penney is faltering the most (at 12.5% decline). Macy’s is relatively flat, while Target is enjoying 5% growth.

Now you understand: With Kohl’s growing in each major consumer group while Walmart declines, it was inevitable that these top retailers would tussle for #1. It should be an interesting New Year for this category…stay tuned.

For more information on this data, please contact BIGinsight™.

Source: BIGinsight™ Monthly Consumer Survey, NOV-10 – NOV-11

* Retail Ratings Reports are available monthly for the following categories: Women’s Clothing, Men’s Clothing, Children’s Clothing, Shoes, Linens/Bedding/Draperies, Electronics, Hardware, Children’s Toys, Sporting Goods, Groceries, Health & Beauty Care, Prescription Drugs.

© 2011, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.