The consumer-spending funk has to end some time and TNS Retail Forward believes it could be now. According to the consulting and research firm, December same-store sales declined 1.5 percent, a marked improvement over November's 2.5 percent drop.
That's based on a survey of about 40 major retailers releasing December figures last Thursday.
"It's encouraging that most retailers saw some improvement in their numbers compared with November," said Frank Badillo, senior economist at TNS. "In the case of Walmart and others, the new weakness largely reflected the impact of weather, lower gasoline prices and even exchange rate effects. These results provide signs that retail weakness may be bottoming out."
The "signs of bottoming" in the December's same-store numbers, according to TNS, are also evident in the TNS Retail Forward ShopperScape Survey fielded at the end of December:
- The percentage of shoppers intending to spend less in the coming month held steady at 54 percent at the end of December;
- Those planning to spend about the same amount rose to 41 percent in December from 39 percent in November;
- The one area of slippage was among shoppers planning to spend more in coming months, easing to five percent from seven percent in November.
Many of the other findings from TNS showed how ugly the bottom is:
- The 1.5 percent decline compared with a 0.2 percent composite gain reported in December of 2007. The results were led by discount department stores--largely Walmart, even though its results were lower than expected. Apparel and accessory stores and department stores reported the worst composite results, followed by warehouse clubs;
- The average household reported spending nearly $60 less on holiday gifts in December--and about $25 less on gifts purchased online in December;
- The categories where shoppers intended to cut back the most: CDs and DVDs, clothing, toys and books. The two categories seeing growth were video games/gaming systems and personal care/beauty items.
At which retailer websites did you shop for holiday gifts? |
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December 2007 |
December 2008 |
|
| Sample Size | 2,150
|
2,528
|
| Amazon.com | 49% |
47% |
| Walmart | 36% |
29% |
| Kmart | 31% |
26% |
| Target | 11% |
9% |
| Best Buy | 25% |
19% |
| Circuit City | 17% |
10% |
| Sears | 14% |
12% |
| JCPenney | 19% |
17% |
| Macy's | 10% |
9% |
| Kohl's | 16% |
14% |
| Toys "R" Us | 19% |
16% |
| Lowe's | 7% |
5% |
| The Home Depot | 8% |
7% |
| Overstock.com | 23% |
16% |
| eBay | n/a |
24% |
| Apple | 5% |
4% |
| Dell | 7% |
5% |
| QVC | 9% |
9% |
| Sam's Club | 7% |
6% |
| Costco | 7% |
6% |
| None of these | 17% |
22% |
| Source: TNS Retail Forward ShopperScape, December 2007-December 2008 | ||
Discussion Question: Do you think the consumer spending malaise may be hitting rock bottom? What signs would you need to see as evidence that the erosion in consumer spending has stabilized?