Consumers Buying Only Necessities, Analyst Says

Charleston, SC, May 8, 2009--American are buying again but they’re buying only what they need.

That is the view of Britt Beemer, founder of America Research Group in Charleston, S.C., which interviews some 10,000 consumers a week.

“The consumer out there is in what I call a retail deep freeze, where they’re not spending any money unless they have to,” he told the Christian Science Monitor.

His view seems at odds with the upbeat news reports Thursday about retail sales. “Kohl’s Corp., BJ’s Wholesale Club Inc. and other US retailers said first-quarter preliminary earnings exceeded their forecasts after April sales signaled shoppers are returning to stores,” Bloomberg reported.

Beemer said Wal-Mart, which reported a better-than-expected 5 percent increase in same-store sales, is merely capturing a greater share of the consumer dollar, he said.

For example, overall retail sales last month rose 1.2 percent, according to Thomson Reuters’ revenue-weighted same-store sales index. But excluding Wal-Mart, they fell 2.7 percent.

Discount shopping is in, discretionary spending is out, Beemer said. Shopping levels at mall-based home-accessory stores and jewelry stores have plunged by half, according to his surveys.

Retail sales won’t pick up in any sustainable fashion, he predicts, until Labor Day 2010.