Advanced Holiday ’08 Outlook

Retailers hoping to make the most of a likely less-than-stellar holiday selling season. One in three (31.4%) plans to spend the same (v. 37.4% in ’07), while two in five (39.0%) intend on spending less (v. 30.9% last year).

While one fifth (21.0%) indicating it’s too early to know, recent improvements in consumer confidence and prices at the pump don’t appear to be enough to offset lasting effects of a still-dismal housing market, the credit crunch, and economic turmoil in general…a minor 4.7% indicate they plan to spend more on gifts this year compared to last, lowering from 6.9% who said the same one year ago. One in three (31.4%) plans to spend the same (v. 37.4% in ’07), while two in five (39.0%) intend on spending less (v. 30.9% last year).

Retailers hoping to make the most of a likely less-than-stellar holiday selling season will benefit from knowing who the likely “Big Spenders” and “Penny Pinchers” are…this season's spenders are more likely to be male, younger, and maintain higher household incomes than their penny pinching counterparts:

Cyber Monday may continue to pick up steam with holiday shoppers hitting the ‘Net to find the best prices on holiday gifts, as 91.0% contend they already regularly or occasionally surf the web to research products online. Electronics (43.3%), Apparel (22.9%), Appliances (22.9%), Home Improvement (19.4%), and Shoes (19.0%) are among the most popular categories researched, while Google (25.6%), Amazon (8.9%), Yahoo (5.5%), and eBay (2.8%) are the most frequently searched sites.

With Apparel a perennial gifting favorite, which sites may host the most traffic this holiday season? Consumers contend they frequent WalMart.com (4.7%) most often for items including clothing, shoes, and accessories…eBay.com (4.5%), JCPenney.com (4.3%), Amazon.com (3.7%), and Kohls.com (3.1%) follow closely behind. Though savvy sites take note: almost half (46.5%) indicate “No Preference” for Apparel site shopped most often…these open-minded shoppers may be lured to sites offering special bonuses, free shipping, and exclusive merchandise.

Now onto the brick and mortar report…in Women’s Clothing, Wal-Mart maintains the lead among budget-conscious consumers…the big discounter leads with 11.7% shopping there most often, relatively flat from 11.9% one year ago, Kohl’s (8.0%) follows in second, also flat (7.8% in ’07). JC Penney (6.4%), Macy’s (5.8%), and Target (2.7%) round out the Top 5 and all pick up share steam compared to ’07.

Over in the Men’s section, Wal-Mart continues to dominate with 15.3% shopping there most often, rising from 14.4% one year ago. Kohl’s (8.7%) and JC Penney (8.4%) follow, growing from 7.7% and 7.9% last year, respectively. Macy’s (5.6%) and Sears (3.3%) complete the Top 5.

The latest round of the Shoe Wars has Payless in the lead for the second consecutive month with 11.2% to Wal-Mart’s 10.8%. The footwear giants (who were tied in September ’07 with 10.8% each) continue to best the rest of the Top 5: Kohl’s (5.1%), DSW (3.6%), and Macy’s & JC Penney (tied, 3.2% each).

NOTE: The monthly Retail Ratings Reports knows where female fashionistas are clamoring up to the latest footwear trends for fall, click here for the details on Kohl’s, Macy’s, and DSW.

www.bigresearch.com/cast-members/big-rrr-shoes-aug08.pdf

Wal-Mart continues to court favor with sports fans…the big discounter leads in Sporting Goods/Exercise Equipment with 15.8% shopping there most often (up from 14.6% last year)…big box Dick’s Sporting Goods, though, is a close second with 12.2%, rising from 10.6% in ’07. Sports Authority (5.4%), Academy (3.1%), and Big 5 (3.0%) also score within the Top 5.

It should come as no surprise in this economic climate that price (53.9%) is the far-leading factor to shop a particular Sports store most often…selection (38.2%), location (37.2%), quality (29.0%), and service (14.2%) follow.

How long can Wal-Mart top the scoreboard? According to the September Consumer Migration Index (CMI), which tracks those who have immigrated to a store (new customers within the past year) against those who have emigrated (left within the past year) and where a positive rating spells net growth to a retailer, shows that Dick’s, boasting a +7.0 CMI, is likely to continue gaining on the big W, who has a relatively flat +0.9 rating:

Shoppers most often cited high prices (15.4%) and inconvenient location (15.3%) as reasons to stop supporting a particular Sporting Goods store…poor selection (8.9%), decline of store appearance (6.7%), and poor customer service (6.5%) followed.

It’s still no contest for Wal-Mart in the Grocery aisle…with 17.4% shopping there most often (up from 14.8% last year), the Bentonville behemoth leads nearest-competitor Kroger (6.4%) by a full 11 points…Publix (4.1%), Safeway (2.8%), and Shoprite (2.1%) complete the Top 5.

And, the Wal-Mart imprint is even deeper in Health & Beauty Care…the big discounter is shopped by almost one in three consumers (30.1%) for soaps, shampoos, and the like, 20+ points ahead of druggists CVS and Walgreens. The complete Top 5: Wal-Mart (30.1%), CVS (8.4%), Walgreens (8.0%), Target (6.5%), and Rite Aid (2.8%).

With consumers most often preferring druggists (40.1%) over discounters (14.5%) for Prescription Drugs, Walgreens (15.8%) and CVS (14.4%) continue to lead this category, rising from 15.0% and 12.5%, respectively, over the last 12 months. Wal-Mart, though, remains a strong contender in third with 10.5%, up from 8.9% last year. Rite Aid (6.1%) and Target (2.4%) round out the Top 5.

(source: BIGresearch executive briefing. To learn more about the Retail Ratings Reports, which are available for 12 major categories, visit www.BIGresearch.com.)