Shop Talk
Retailers, consumers and prices
Check Out Line: Clouds lift ever more slightly on consumer confidence
Check out more signs of improving consumer confidence.
According to a study released this week by Discover Financial Services U.S. consumers were getting more comfortable with their budgets. Also, slightly more consumers now believe they’d have money leftover after paying their bills to have fun with, hinting that consumers won’t be scrimping and saving quite as much.
“After months of cutbacks, we’ve seen two months in a row now in which consumer spending intentions appear to have stabilized,” said Julie Loeger, senior vice president of brand and product management for Discover, in explaining the findings.
That may be one reason why retailers roundly beat February sales expectations and why, by and large, economists and analysts believe the improvements in consumer shopping will continue into the spring. But that could just mean the bleeding is over rather than shoppers are again ready to go hog wild.
Discover warned “there is little sign consumers are planning to increase their spending in the months ahead.” Still, these days, we’ll take good news where we can get it. Job losses in February were smaller than feared, but even there economists said the snowstorms made the month a tough one to read.
Survey: Most consumers plan to spend less this holiday season
Retailers, listen up. A survey from Discover shows that more consumers believe economic conditions are still getting worse.
Discover’s U.S. Spending Monitor for October fell 3.2 points to 85.8 (that’s out of 100, which is where the index started in May 2007).
Forty-six percent felt economic conditions were getting worse. That’s up 3 points from September and the first time the survey has seen an increase since July.
Slightly more women (58 percent) than men (53 percent) rated the economy as poor. Overall, 56 percent called the economy poor, up from 52 percent in September.
“The Monitor has always shown that women tend to be less optimistic than men about the economy and their finances,” said Julie Loeger, senior vice president of brand and product management for Discover. “But the record jump in the number of women rating the economy as poor and the pessimism over the current state of their finances may indicate a weak holiday shopping season ahead.”
A brighter view doesn’t lead to increased spending
Americans may have become more confident in the economy but they haven’t started spending heavily again — and that could be bad new for retailers this holiday season.
Discover’s U.S. Spending Monitor for September rose for the second straight month, climbing 2 points to 89 (based out of 100). Thirty-three percent of respondents said they felt economic conditions were improving, a Monitor high and a 2-point rise from August.
Consumers more confident, still not spending
While more consumers feel better about the economy, they are not getting back to their spending ways, according to a survey released on Wednesday.
Discover’s U.S. Spending Monitor for August showed a rebound, with results rising to 87 (out of 100) from July’s 83.5.
A whopping 21 percent felt economic conditions were improving, marking a high for the monitor and up 7 points from July. And, just over 21 percent felt their own finances were shaping up, marking the highest number reported since August 2008 (aka the month before the Lehman bankruptcy frazzled the markets).
Check Out Line: Consumer optimism fizzles in summer heat
Check out the recession-battered consumer in a new Discover survey.
Consumer attitudes continue to weaken according to Discover’s U.S. Spending Monitor for July, as results fell for the second consecutive month to 83.5 (out of 100) from 85.6.
Translation: Growing pessimism about the economy and personal finances has more consumers planning overall spending cuts.
Check Out Line: Consumers cut back again in June
Check out the continued concern over the U.S. economy.
Discover’s US Spending Monitor, released on Wednesday, showed that the economy is weighing more on consumers’ minds when it comes to everyday purchases. The monitor, which began in May 2007 with a base index of 100, fell for the first time in four months, to 85.6 from 86.2.
Fifty-nine percent of the 8,200 respondents rated the economy as poor, up from 55 percent in May and the first increase since February. Still, 33 percent rated their own finances as good or excellent, in line with May’s responses.
Check Out Line: Green shoots sprouting?
Check out a glimmer of hope on the employment front. 
Planned layoffs for U.S. firms fell in April to their lowest levels since last October, according to a report from outplacement consultancy Challenger, Gray & Christmas.
Okay, layoffs are still at recessionary levels, with U.S. employers announcing plans to cut 132,590 jobs in April.
But CEO John Challenger says the fact that they are falling could mean that employers are a little more confident about future business conditions.
If employers start feeling more confident and stop laying off people, that could spur more confidence in employees and eventually get them to spend more at retailers, which, after all, is what this blog is about.
In a report by Discover, the credit card issuer, the number of consumers saying the economy was getting better was 23 percent in April. While that might not seem like much, it is still 8 percentage points better than in March.
Also, 51 percent of consumers said the economy was getting worse, down from 61 percent in March.
“Consumers continue to approach their spending with caution, albeit a little less so in April,” said Julie Loeger, senior vice president of brand and product management for Discover Financial Services. “As they grow more confident in the economy and their finances, consumers may boost their spending; which should help with an economic recovery.”
Are these the “green shoots” of an improving economy, or just optimism waiting to get shot down?
Also in the basket:
Carlsberg Q1 doubles on Eastern Europe gains, cost cuts
In Target tussle, a store becomes a battlefield (N.Y. Times)
Barneys aiming to close two stores (Wall Street Journal)
(Reuters photo of job fair)
Soaring gas prices sinking consumer spending, sentiment
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.
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Resident Shop Talk Expert
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