Shop Talk

Retailers, consumers and prices

Recession ushers in era of the savvy shopper, but will it last?

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SAFRICA-INFLATIONThe indicators are there: people are saving more and they’re spending less.  The era of the savvy(er) shopper has officially arrived. But how long will it last?

Family financial guru Ellie Kay has been talking about smart shopping for years, publishing numerous books and maintaining a blog about how to shop smart. With the back-to-school shopping season running up against the recession, she’s been hearing a lot from her readers about how they’ve changed their buying habits.

“It’s not enough to run a sale, there has to be something extra that retailers are putting out there for the consumer to want to spend back-to-school dollars in their store,” she said. “That includes sales plus store coupons, or free gifts, or if they’re shopping online, they want free online shipping.”

Kay said it’s also not enough for retailers to have a value message anymore. With consumers surfing coupon websites like fatwallet.com and doubling up on store coupons, she said retailers have to work extra hard to get consumer’s attention.

Check Out Line: Sales tax holidays a political gimmick

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shop12Check out a study  that calls sales tax holidays poor tax policy.

With a number of states wrapping up back-to-school sales tax holidays, the Tax Foundation, which describes itself as a nonpartisan organization that monitors fiscal policy at the federal, state and local levels, called such exemptions “nothing more than political gimmicks that do little to help consumers.”

The Tax Foundation said such ”holidays,” which the group said amount to a 4 to 7 percent price reduction for consumers for only a brief period, simply favor certain industries over others and increase tax code complexity. In some cases, some retailers simply raise prices during a “holiday,” effectively absorbing the benefit, the group said.

Check Out Line: Is it Christmastime already?

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Check out some shoppers saving for holiday gifts.

santa-claus-on-the-beachYes, it is still summer, but a comparison shopping Web site decided to find out how recession-weary shoppers feel about spending for the upcoming winter holidays.
 
Just over 75 percent of respondents to PriceGrabber.com’s recent survey said they are more concerned about the cost of holiday gift-giving this year.  So, how many are starting to save earlier?  Only 41.1 percent.

Here’s a quick breakdown of the survey from PriceGrabber.com:
 
Compared to the 2008 holiday season, are you more concerned about the cost of holiday gift-giving this year because of the recession?
 
35.2% Yes, I am highly concerned
40.1% Yes, I am moderately concerned
24.7% No, I am not at all concerned
 
Are you planning to start saving money for holiday gift-giving earlier than last year because of the recession?

Check Out Line: Earnings-palooza!

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macys1Check out all the earnings in the consumer world.

Several retailers and food companies posted quarterly results, offering different views on where they stand in a recession that has consumers dialing back spending.

Macy’s posted a better-than-expected profit as it cut costs, but the department store operator’s new, higher earnings forecast shows full-year profit could still fall short of analysts’ expectations.

Check Out Line: Consumer optimism fizzles in summer heat

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shop11Check 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: More bad news for U.S. retailers in July

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target11Check out the expected drop in July same-store sales for U.S. retailers.

July typically offers retailers a chance to bolster second-quarter profits by selling new autumn merchandise, but they likely got little boost this year from back-to-school sales as cool weather, a weak job market and a lack of tax-free holidays has analysts expecting an 11th consecutive drop in monthly same-store sales.

Consumers have shown a penchant for skipping full-price items to stretch their budgets amid the recession.

from Raw Japan:

Pet love, vanity help firms survive recession

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Japanese consumers are getting more penny-pinching by the day, and they're probably not going to be splashing out more freely anytime soon after wage earners' take-home pay logged the biggest drop on record in the year to June and people's summer bonuses took a hefty cut.

But no matter how bleak things get, there will always be some companies that shoppers -- however closely they're guarding their wallets -- don't hesitate to throw precious money at. 

Check Out Line: Several companies ring up strong profits

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shack1Check out the better-than-expected profits at Alberto Culver, Lorillard and RadioShack.

Alberto Culver, the maker of VO5 shampoo and Mrs. Dash seasoning, said its third-quarter profit, excluding one-time items was 30 cents a share, a penny above what analysts had expected, thanks to strong demand for its TRESemme shampoo.

Check Out Line: Back to last year’s fashion for back-to-school season

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shop11Check out the expected weak back-to-school shopping season predicted by America’s Research Group and UBS.

U.S. consumers will spend 8.5 percent to 12 percent less this year on back-to-school items than they did last year as cash-strapped parents try to get their kids to don last year’s fashions again, according to a survey by America’s Research and UBS. Back-to-school sales fell 5 percent last year.

Check Out Line: Less money for pencils and school books

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students1Check out the expected lower spending on back-to-school items.

Parents plan to spend less money on back-to-school gear for their children this year in another worrisome sign for retailers heading into what is normally their second biggest selling period behind Christmas.

The average family with children in kindergarten through 12th grade is expected to spend $548.72 on back-to-school merchandise this year, down 7.7 percent from 2008, according to the National Retail Federation.

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