Columbus, OH, September 8, 2006--The retail spending pace should moderate slightly in September, according to Retail Forward's Future Spending Index. The index edged down to 92.7 this month from the 93.2 reading in August.
"Consumers appear to be in a holding pattern as they weigh the impact on their wallets of the recent slowdown in job growth," said Steve Spiwak, an economist with Retail Forward. "Down Market households, in particular, have become more pessimistic about job prospects and whether their incomes will be strong enough to service growing credit card debts."
This month's ShopperScape results also show that apparel, accessories, beauty care and home furnishings retailers have the highest penetration of online and catalog shoppers among retailers with a multi-channel offer that spans those shopping modes as well as brick-and-mortar stores.
Other results indicate that Wal-Mart wins the retailing popularity contest hands-down. In terms of shopping experience and value, Wal-Mart ranks higher than arch-competitor Target.
Down market households are poised to downshift spending the most in September. In contrast, Up and middle market households are expected to increase spending somewhat, in part because of the lagging effects of home buying.
The Future Spending Index for down market households (incomes of $22,500 or less) clocked in at 92.0 in September, down from 101.5 in August. The combined impact of job and income concerns and elevated credit card debts are sending more down market shoppers to the retail sidelines this month.
The index for up market households (incomes $75,000 or greater) held nearly steady in September with an 89.3 reading, compared with 89.0 the month before. Slightly better income growth compared with last year and a pick up in home buying were enough to offset rising concerns about debt burdens and weaker investment performance.
Recent home buying propped up the index for middle market households (incomes of $22,500 to $75,000), which rose to 96.0 in September from 94.2 in August. Households in this segment also reported better investment worth compared with a year ago, helping to offset the negative impact of heightened job and income worries.
Overall, slightly fewer shoppers report they shopped online in August compared to April. up market online shopping has remained steady since April while fewer middle market shoppers have turned towards cyberspace for their shopping needs. On the other hand, there has been an increase in online shopping activity among down market shoppers, likely due in part to rising Internet access and the disproportionate impact of high gas prices on this income segment.
Overall, more than two-thirds (67%) of all shoppers have shopped for products online in the past 6 months, down a bit from April's level.
Up Market Shoppers are the most likely to shop for products online. More than three-quarters (78%) report that they have shopped for products online in the past 6 months.
Conversely, Down Market Shoppers are still the least likely to shop for products online; however, only the Down Market has seen an increase in online shopping activity since April, 2006.
Brick and mortar shopping continues to dominate retailing despite the rise of the Internet. However, through ShopperScape™, Retail Forward demonstrates how the penetration of the Internet and catalog shopping channels fares against in-store shopping for key retailers with presence in all three channels.
