Retailers, consumers and prices
Check out the recent rise in U.S. sales.
U.S. chain store sales rose 3.3 percent last week versus a year ago, according to new data from Redbook. The sales were also up 0.8 percent in May so far versus April, Redbook’s figures on general merchandise retailers with about 9,000 U.S. stores showed.
That’s a bit brighter than the 0.5 percent rise in April same-store sales we saw last week, based on 28 chains.
Meanwhile, consumers are getting tech-savvy about their food shopping. Deloitte said that more consumers are turning to their computers to look for deals on food. According to the firm’s 2010 Consumer Food Safety Survey, 33 percent of people have signed up to get emails, recipes or coupons from food makers, a 6 percentage point rise from just two years earlier.
Deloitte found that food shoppers also feel the quality of store, or private label, brands is better. Fifty-five percent of those surveyed said they are buying store brands because they believe the quality is comparable to national branded foods, up 14 percentage points from 2008. Six percent even said the quality is better than national brands.
Check out the latest raft of earnings for clues on the U.S. economy’s health.
LVMH, the world’s biggest luxury group, posted a forecast-beating 13 percent increase in same-store sales, helped by a strong rebound in the United States and Europe.
Retail experts don’t expect this back-to-school season to be anything to write home about, as consumers continue to pare back expenses.
But a recent survey cited fewer people cutting back on back-to-school items than last year – 64 percent compared with 71 percent.
“It’s going to be bad but it’s not going to be as bad,” said Stacy Janiak, vice chairman and U.S. retail leader for Deloitte LLP, which conducted the survey, speaking of spending during the season.
She pointed to data showing that 1 in 7 consumers — 14 percent — believe the economy is starting to recover.
“It was only 14 percent but it was 2 percent last year,” she said. “It’s not a lot for anyone to get optimistic about, by any stretch, but it’s a ray (of hope).”
“People have a sense that we’ve been through the worst of it,” Janiak said, noting that people seem to believe another big drop in the economy unlikely.
Still, the gloom this year is driven more by a desire to save, as well as worries over job losses.
“Last year what was driving people’s concern was these things that would eat into their wallet — higher gas and higher food prices, energy costs,” said Janiak. “This year it’s about what’s in the wallet to begin with — the loss of a job, or fear of that, or intensity on savings to keep what’s in your wallet.”
Some 22 percent of survey respondents cited “loss of job in household” for their frugality, compared with 12 percent last year, and 17 percent cited “fear of loss of job” compared with 9 percent a year earlier.
In June, Deloitte found that the pace of decline in consumer spending appeared to be abating. Its consumer spending index, which tries to track consumer cash flow to point to future consumer spending, rose in June after falling four consecutive months.
The U.S. jobless rate hit 9.5 percent last month, the highest in 26 years, and many economists expect it to hit 10 percent this year.
Last week, the National Retail Federation predicted the average U.S. family with kids in school through 12 grade would spend 7.7 percent less than last year, but college students and their families would spend 3 percent more. Nevertheless, overall college spending is expected to decline 4 percent to $30.08 billion due to fewer people planning on attending college this fall.
The impending U.S. holiday shopping season is expected to be a weak one, but the debate is coming down to whether it could end up as one of the worst on record, as consumers show an increasing reluctance to spend.
Government data released on Friday showed consumers continue to put the brakes on spending. Sales at U.S. retail stores fell for a second straight month, with sales of clothing and electronics, which typically see high demand for back-to-school, were weaker in August than July.
Check out the back-to-school blues.
Nope, it’s not just kids who are likely to find going back to school depressing. Retailers are also likely to find the back-to-school season tough to take.
In a new survey by Deloitte, 71 percent of of respondents said they plan to spend less on back-to-school items this year. In fact, almost half plan to reduce their household spending by more than $100.
Stop us if you’ve heard this one before: Higher gas and food prices continue to pressure consumers, Deloitte’s U.S. Retail leader Stacy Janiak said in a news release.
“Retailers should focus on areas that will contribute to profitable growth, such as adapting their merchandising and promotional activities to increase loyalty among existing customers and attract new customers,” she said.
Among survey findings: 79 percent will buy more back-to-school items on sale, 68 percent will buy more lower-priced items and 46 percent will shop at different — or less expensive — stores than usual.
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Shoppers loading up their carts may be becoming more wary of the food they pick up from the shelves, according to a food safety survey by Deloitte Consulting LLP.
The survey, which polled 1,110 consumers across America on April 21, found that 57 percent of people stopped eating a type of food either permanently or temporarily because of a food recall.
The poll also found a sharp contrast in consumer perceptions of imported food versus domestic food, with 56 percent reporting that they think imported food is “not at all” or “somewhat” safe. Eighty percent said they think food produced domestically is safe.
Meat recalls ranked as a top food safety concern. Seventy-eight percent of consumers were concerned about beef recalls, while 67 percent were worried about chicken recalls.
Dairy recalls and fresh fruit/vegetable recalls followed at 53 percent each.
The results were released as restaurants and retailers began to pull certain types of tomatoes from their menus and shelves after a salmonella scare that has resulted in 145 reported cases and 23 hospitalizations, the U.S. Food and Drug administration said as of Saturday. The largest recall ever of meat in the U.S. occurred in February, mainly involving beef products.
Survey respondents also overwhelmingly (89 percent) said they want to see stores sell more fresh fruits and vegetables from local farms, and 69 percent said they were willing to pay slightly more as a result.
Full survey results can be found here.
The average price for gasoline soared 6.9 cents over the last week to a record of $3.79 a gallon. That means the national price for regular, self-service gasoline is now up 57 cents from a year ago, according to data relased by the federal Energy Information Administration on Monday.
With personal income stagnating, consumers are finding it hard to offset the ongoing spike in gas prices.