May Same-Store Sales Worsen, But Shoppers Show Positive Signs, Retail Forward Reports
COLUMBUS, June 4, 2009—Retail same-store sales excluding Walmart deteriorated in May, but shoppers also showed signs of letting up on their belt-tightening behavior, Retail Forward reports.
Sales-weighted same-store sales excluding Walmart fell 4.2% in May for more than 30 retailers reporting monthly results today. That was worse than the 2.3% decline last month and the 1.9% gain in May of 2008 for the same composite measure calculated without Walmart. Including Walmart, same-store sales were up 0.9% in April and up 3.2% in May of 2008.
Despite the same-store sales results, shoppers reported in May’s ShopperScape™ survey by Retail Forward that they are less inclined than last year to limit their spending, seek deals or trade down to lower-priced brands and retailers in response to the economic downturn.
“The aggregate sales numbers may not reflect it for a while, but shoppers are showing signs of moderating their frugality of recent months. If shoppers can sustain this positive momentum, then it should bear fruit for retail sales by the end of the year, if not the coming months,” said Frank Badillo, Senior Economist at Retail Forward.
May’s declines were least severe among Apparel and Accessory Stores and most severe among Department Stores. Warehouse Clubs and miscellaneous other retailers were between the extremes. Note that Walmart announced that it would stop reporting monthly results beginning in May. (For a list of the retailers reporting and their results, please follow this link: http://www.retailforward.com/retailintel/samestr_sales.pdf. ».)
Difficult comparisons to year-ago periods pumped up by federal stimulus checks and high fuel and food prices may be reasons why the sales numbers provide little evidence of improving shopper sentiment found in the latest Retail Forward ShopperScape™ survey (Figures 1 to 3):
- Compared with their responses last August, in May markedly fewer households said the economic downturn had significantly changed their shopping behavior this year (Figure 1). In August of 2008, more than one-third of households said their behavior had changed significantly. In May, that percentage dropped to nearly one-fourth.
- At the same time, the percentage of households that said their behavior this year had changed not very much or not at all increased to 31% in May from 25% in August.
Shoppers changing their behavior remain focused on deal-seeking, limiting spending and trading down—but to a significantly lesser degree in May compared with August of 2008, according to the latest ShopperScape™ survey (Figure 2).
- Deal-seeking tactics. The percentages of shoppers taking advantage of good sales/deals, doing more price comparison shopping and stocking up on items fell significantly in May compared with August. Showing little letup, however, is shoppers’ commitment to using more coupons (45%) and buying in bulk quantities (21%).
- Limiting spending. While shoppers remain intent on buying fewer things—53% in May compared with 55% in August—their resolve has slipped in terms of other limiting behaviors. Smaller percentages of shoppers are reporting using other methods to limit spending, such as buying only things they truly need, shopping less often, buying fewer luxury items, postponing purchases, fulfilling only near-term needs and keeping things longer before replacing them.
- Trading down. All trading down tactics—buying less expensive versions of products, buying more store brands, doing more shopping at discount retailers and trading down to less expensive brands—are being employed by smaller percentages of shoppers. That being said, one-fifth to one-third of the shoppers who have altered their behaviors are trading down in some ways.
The changes in shopping behavior are also less likely to persist after the economy improves, given a falloff in shopper responses in May compared with the August 2008 ShopperScape™ survey (Figure 3).
- The few exceptions where shoppers showed no significant letup in their plans to make behaviors permanent are with regard to: Using more coupons, buying fewer things, and postponing purchases.
- Shoppers otherwise reported that they are somewhat less inclined—to varying degrees—to continue all other deal-seeking, limiting and trading down behaviors. Generally, the letup is more pronounced among trading down behaviors than limiting behaviors.
- “Buying less expensive versions of products” is the behavior showing the biggest falloff in terms of likelihood to continue as the economy improves. In May, 22% of shoppers said the behavior would likely continue—a drop-off of 10 percentage points from nearly one-third of shoppers in August of last year.
In terms of Father’s Day spending plans, ShopperScape™ survey results indicate that shoppers plan to pull back on spending on gifts slightly from last year—but not as much as they did between 2007 and 2008 (Figure 4).
- Sixteen percent plan to spend much or somewhat less on Father’s Day this year vs. 14% last year and 7% in 2007.
- About half (48%) plan to spend about the same as they have previously while about one-third (32%) don’t buy Father’s Day gifts.
Figure 1. How Much Downturn in Economy Changed Shopping Behavior This Year?
|
All Shoppers |
All Shoppers |
|
| Significantly |
34% |
27% |
| Somewhat |
41% |
42% |
| Not very much |
20% |
25% |
| Not at all |
5% |
6% |
Bolding indicates significant difference between August 2008 and May 2009 percentages
Source: Retail Forward ShopperScape™ August 2008 and May 2009
Figure 2. How Shopping Behavior Changed This Year*
|
All Shoppers |
All Shoppers |
|
| Deal-seeking |
|
|
| Taking advantage of good sales/deals |
65% |
57% |
| Doing more price comparison shopping before making a purchase |
52% |
42% |
| Using more coupons |
47% |
45% |
| Buying in bulk quantities |
23% |
21% |
| Stocking up on items expected to rise in price |
21% |
18% |
| Limiting spending |
|
|
| Buying only things I truly need |
65% |
61% |
| Buying fewer things |
55% |
53% |
| Shopping less often |
54% |
49% |
| Buying fewer luxury items |
51% |
43% |
| Postponing purchases |
47% |
43% |
| Buying only items needed in the near term |
40% |
31% |
| Using/keeping items longer before buying replacements |
35% |
29% |
| Trading down |
|
|
| Buying less expensive versions of products |
45% |
33% |
| Buying more store brands instead of national or high-end brands |
43% |
31% |
| Doing more shopping at discount and value retailers |
37% |
28% |
| Trading down to less-expensive brands |
33% |
23% |
*Among shoppers who have significantly or somewhat changed their shopping habits due to the U.S. economy
Bolding indicates significance difference between August 2008 and May 2009 percentages
Source: Retail Forward ShopperScape™ August 2008 and May 2009
Figure 3. Shopping Behaviors Likely to Continue as the Economy Improves*
|
All Shoppers |
All Shoppers |
|
| Deal-seeking |
|
|
| Taking advantage of good sales/deals |
57% |
49% |
| Doing more price comparison shopping before making a purchase |
42% |
35% |
| Using more coupons |
39% |
40% |
| Buying in bulk quantities |
17% |
15% |
| Stocking up on items expected to rise in price |
15% |
12% |
| Limiting spending |
|
|
| Buying only things I truly need |
50% |
46% |
| Buying fewer things |
34% |
33% |
| Shopping less often |
34% |
31% |
| Buying fewer luxury items |
33% |
26% |
| Postponing purchases |
23% |
21% |
| Buying only items needed in the near term |
25% |
18% |
| Using/keeping items longer before buying replacements |
24% |
20% |
| Trading down |
|
|
| Buying less expensive versions of products |
32% |
22% |
| Buying more store brands instead of national or high-end brands |
31% |
23% |
| Doing more shopping at discount and value retailers |
29% |
21% |
| Trading down to less-expensive brands |
20% |
13% |
|
|
|
|
| None of the above |
3% |
3% |
*Among shoppers who have significantly or somewhat changed their shopping habits due to the U.S. economy
Bolding indicates significance difference between August 2008 and May 2009 percentages
Source: Retail Forward ShopperScape™ August 2008 and May 2009
Figure 4. Intentions to Spend More, the Same or Less on Father’s Day Compared with Last Year
|
|
All Primary Shoppers |
All Primary Shoppers |
All Primary Shoppers |
| Much More |
2% |
2% |
1% |
| Somewhat More |
7% |
7% |
3% |
| About the same |
50% |
46% |
48% |
| Somewhat Less |
4% |
9% |
10% |
| Much Less |
3% |
5% |
6% |
| Do not plan to spend anything for Father’s Day this year |
34% |
31% |
32% |
Source: Retail Forward ShopperScape™, May 2007, 2008 and 2009
###
About Retail Forward
Retail Forward, Inc. (www.retailforward.com » a Kantar Retail Company, is a global management consulting and market research firm specializing in retail intelligence and strategies. The company’s syndicated research and executive development program known as the Retail Forward Intelligence System™, provides members with an authoritative perspective on the retail and consumer products industries.
About the Retail Forward ShopperScape™
The Retail Forward ShopperScape™ survey is conducted each month with a sample of 4,000 U.S. primary household shoppers. The monthly survey is conducted online among a nationally representative sample of households. This month’s survey was conducted during the last week of prior month 2009. Results from the survey are available to members of the Retail Forward Intelligence System™ as well as through individual reports available for purchase. For more information on ShopperScape™ or the Retail Forward Intelligence System™, contact Kathy Clarke (kclarke@retailforward.com ») or visit the company’s web site at www.retailforward.com ».
