November Economic and Consumer Insights Executive Briefing

BIGresearch's Consumer Intentions & Actions Survey monitors over 8,000 consumers each month providing unique insights & identifying opportunities in a fragmented and transitory marketplace. Here are some excerpts from the November Briefing:

With the unemployment rate crossing 10% for the first time since 1983, and the DJIA recently closing at a 2009 high, how are consumers reacting to these mixed signals? In November, 29.3% report they are confident/very confident in chances for a strong economy, down a point from October (30.4%), but still rising from a year ago (22.3%). However, an eight point deficit still exists between the current reading and November 2007 (37.2%).

With the relatively quiet November elections behind us, consumers relax concerns with political/national security issues…in November, one in five (21.3%) continues to worry, down a point from last month (22.4%) and falling more than seven points from a year ago (28.7%).

While it isn’t expected to be a banner year for holiday sales, consumers appear to be curtailing some of their conservatism in favor of a little retail merriment…in November, 45.9% contend they’ve become more practical/realistic in purchasing, down nearly three points from a month ago (48.8%) and almost four points from November ‘08 (49.8%). Still, the effects of the recession exist…practicality remains seven points above November ’07 (38.8%).

Like practicality, those focused on needs over wants become fewer in number as retailers attempt to ring up holiday sales…while the majority (55.2%) is currently focused on necessities, this figure has declined slightly from October (56.0%) and three points from a year ago (58.2%).

With the U.S. unemployment rate continuing to grow, consumers seem divided about its future direction, as the groups who expect “more” and “fewer” layoffs in the next six months both rise from October…this month, more than a third (36.2%) expect layoff levels to increase, up from 34.6% last month, but vastly improving from November ’08 (59.4%). Two in five (43.7%) contend that the layoff rate will remain the “same,” down from 47.0% in October, while one in five (20.1%) hopes for “fewer” (v. 18.5% last month).

Personal concerns with becoming laid off remain flat from October at an encouraging 4.7%, falling 40%+ from the figure recorded a year ago (8.2%).

Here’s some news retailers can give “Thanks” for: consumers are relaxing their focus on financials in November…while “pay down debt” remains the most popular plan over the next three months, fewer (32.6%) are planning to do so compared to one month (34.7%) and one year (36.3%) ago. Those planning to decrease overall spending (30.4%) is also on the decline from October (33.7%) as well as November ’08 (35.5%). Intent to increase savings (24.0%) and pay with cash more often (21.1%) additionally weakens from the previous month and year.

However, look for fiscal conservatism to resurge once the holiday shopping has been completed…with nearly half (46.9%) indicating they are “worse off” financially compared to a year ago, consumers are still cognizant of the recession’s impact on their bank accounts:

While consumers tend to shop department stores (28.7%) over discounters (20.8%) and specialty shops (13.7%) for Women’s Clothing, one big discounter continues to shine, specifically speaking…more than one in ten (11.9%) shop Walmart most often, rising about a point from a year ago (11.0%), while Kohl’s (9.6%) finishes second, gaining similarly from the previous year (8.6%). JC Penney (7.2%), Macy’s (6.2%), and Target (2.5%) round out the Top 5.

Walmart’s lead is even stronger in the Men’s section, where 14.9% shop the discounter most often…Kohl’s and JC Penney follow with 8.8% and 8.6%, respectively, while Macy’s (5.2%) and Sears (2.8%) complete the Top 5.

And with three times the share of its nearest competitor in Children’s, Walmart completes the triple crown in clothing…the Bentonville behemoth leads with 14.8% shopping there most often, while Kohl’s (4.8%), Target (4.5%), JC Penney (4.2%), and Old Navy (2.0%) follow.

Have designer offerings and the ever present BOGO deals piqued consumers’ interest in Payless? For the first time in 10 months, the discount specialty (with 10.7% shopping there most often) has landed ahead of big discounter Walmart (10.3%) in Shoes. The complete Top 5: 1. Payless (10.7%), 2. Walmart (10.3%), Kohl’s (4.7%), 4. DSW (3.4%), 5. JC Penney (3.1%).

With the majority of shoppers headed to Best Buy (33.2%) or Walmart (19.8%) for Electronics, look for these retailers to be hot holiday destinations for popular gifts like TVs, cell phones, and video games. Target (2.5%), Amazon.com (2.4%), and Sears (1.8%) follow not-so-closely behind.

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