COLUMBUS, August 7, 2008—July same-store sales growth weakened to 2.8% from the prior month and remained about the same as prior-year results for about 40 retailers reporting monthly results today, TNS Retail Forward reports.
July’s result is down from a 4.5% sales-weighted composite reported last month and off slightly from the 2.9% composite reported in July of 2007.
“The summer spike in fuel and food prices is causing shoppers to pare back their plans for tax rebates and back-to-school spending. That’s clearly squeezing spending on retail goods other than food and gas,” said Frank Badillo, Senior Economist at TNS Retail Forward.
July’s results were led by stronger than average results at Warehouse Clubs and Drug Stores. Discount Department Store sales were in the middle of the pack. Lagging were Department Stores and Apparel and Accessory Stores. (For a list of the retailers reporting and their results, please follow this link: http://www.retailforward.com/retailintel/samestr_sales.pdf ».)
July same-store sales appeared to get less of a boost from tax rebates than what shoppers planned before fuel prices spiked in June, according to TNS Retail Forward’s July ShopperScape™ survey (Figure 1):
- By July, more shoppers ended up using their tax rebate for everyday expenses (such as groceries and gasoline) than was the case for early tax rebate recipients in May.
- Compared with plans made in February, fewer shoppers ended up using their tax rebate for special purchases such as big-ticket consumer electronics items.
- Fewer households were also able to keep to their original plans to save their tax rebate or use it to pay down credit cards, bills and mortgage debts.
Same-store sales may have also been hurt in July by shoppers’ plans to do less back-to-school spending compared with prior years (Figure 2).
- Less than one-half of shoppers (44%) planned to spend about the same as last year. That share declined by seven percentage points in July compared with a year ago.
- Nearly one-fifth of shoppers (19%) planned to spend less than last year. That share increased by six percentage points in July compared with a year ago.
Like tax rebates, back-to-school spending is also giving a boost primarily to discount retailers, according to the July ShopperScape™ survey (Figure 3).
- Discount stores, supercenters and dollar stores are among the retail channels that are gaining more back-to-school shoppers than they are losing.
- Off price apparel and value department stores are faring better than traditional and upscale department stores in attracting back-to-school shoppers.
- Consumer electronics and office supply retailers are also among the channels losing more back-to-school shoppers than they are gaining.
The deteriorating environment for many retailers may begin to bottom out in August based on some improvement in shoppers’ spending plans for the next month (Figure 4).
- Less than one-half of shoppers (45%) plan to spend less in the next month than a year ago. That’s an improvement of seven percentage points from shoppers’ plans last month.
- The share of shoppers planning to spend more in the next month than last year improved by four percentage points to 14%.
Figure 1. How Shoppers Planned to Use vs. Used Tax Rebate Money
|
|
Planned to Use February
|
Used May 2008
|
Used July 2008
|
|
Paid credit card or other bills
|
37%
|
30%
|
28%
|
|
Paid down mortgage debt
|
4%
|
2%
|
2%
|
|
Used it for everyday expenses
|
26%
|
22%
|
27%
|
|
Used it for special purchase
|
20%
|
11%
|
11%
|
|
Put it into saving
|
34%
|
23%
|
20%
|
|
Made charitable donations
|
3%
|
2%
|
2%
|
|
Other
|
8%
|
11%
|
10%
|
*Among shoppers who expect to get a rebate, have received a rebate or have decided how to use the money from their rebate.
Source: TNS Retail Forward ShopperScape™
Figure 2. Plans to Spend on Back-to-School 2008 vs. 2007 and 2006
|
|
July 2006
|
July 2007
|
July 2008
|
|
Total percent of shoppers planning to spend on Back-to-School
|
39%
|
38%
|
39%
|
|
Much More/Somewhat More
|
37%
|
33%
|
33%
|
|
About the same
|
47%
|
51%
|
44%
|
|
Somewhat Less/Much Less
|
13%
|
13%
|
19%
|
|
This is the first year I will be making back-to-school purchases
|
3%
|
3%
|
4%
|
Source: TNS Retail Forward ShopperScape™
Figure 3. Percentage of Back-to-School Shoppers Planning to do More,
Same or Less Back-to-School Shopping at Retail Channels This Year Compared with Last Year
|
|
More
|
Same
|
Less
|
Do not shop
|
% Point Difference (More-Less)
|
|
Discount stores/supercentre
|
22%
|
65%
|
8%
|
5%
|
+14
|
|
Dollar stores or close-out retailers
|
14%
|
40%
|
9%
|
37%
|
+5
|
|
Warehouse clubs
|
7%
|
29%
|
9%
|
55%
|
-2
|
|
Off-price speciality apparel retailers
|
9%
|
31%
|
11%
|
49%
|
-3
|
|
Value department store retailers
|
9%
|
46%
|
14%
|
31%
|
-5
|
|
Supermarkets
|
4%
|
35%
|
10%
|
51%
|
-6
|
|
Drug store retailers
|
4%
|
38%
|
13%
|
46%
|
-9
|
|
Traditional specialty apparel retailers
|
5%
|
30%
|
14%
|
51%
|
-9
|
|
Office supply retailers
|
7%
|
47%
|
16%
|
30%
|
-9
|
|
Upscale department store retailers
|
3%
|
13%
|
12%
|
72%
|
-10
|
|
Consumer electronics retailers
|
5%
|
24%
|
16%
|
55%
|
-11
|
|
Traditional department store retailers
|
3%
|
28%
|
16%
|
53%
|
-13
|
Source: TNS Retail Forward ShopperScape™, July 2008
Figure 4. Compared to this time last year, in the next month do you plan to…?
|
|
February 2008
|
March 2008
|
April 2008
|
May 2008
|
June 2008
|
July 2008
|
Down Market (under $22,500)
|
Middle Market ($22,500 - $84,999)
|
Up Market ($85,000+)
|
|
Spend much/somewhat more at retail stores than you did last year
|
14%
|
12%
|
12%
|
12%
|
10%
|
14%
|
12%
|
13%
|
16%
|
|
Spend about the same at retail stores as you did last year
|
59%
|
48%
|
44%
|
39%
|
39%
|
41%
|
36%
|
40%
|
46%
|
|
Spend much/somewhat less at retail stores than you did last year
|
28%
|
40%
|
44%
|
49%
|
52%
|
45%
|
52%
|
47%
|
38%
|
Bold indicates significance vs. all shoppers in July 2008
Source: TNS Retail Forward ShopperScape™
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About TNS Retail Forward
TNS Retail Forward, Inc. (http://www.retailforward.com/) is a global management consulting and market research firm specializing in retail intelligence and strategies. The company's syndicated research and executive development program known as the Retail Forward Intelligence System™, provides members with an authoritative perspective on the retail and consumer products industries.
About the TNS Retail Forward ShopperScape™
The TNS Retail Forward ShopperScape™ survey is conducted each month with a sample of 4,000 U.S. primary household shoppers. The monthly survey is conducted online among a nationally representative sample of households. This month's survey was conducted during the last week of July 2008. Results from the survey are available to members of the Retail Forward Intelligence System™ as well as through individual reports available for purchase. For more information on ShopperScape™ or the Retail Forward Intelligence System™, contact Kathy Clarke (mailto:kclarke@retailforward.com) or visit the company's web site at http://www.retailforward.com/.
About TNS
TNS is a global market insight and information group. Our strategic goal is to be recognized as the global leader in delivering value-added information and insights that help our clients to make more effective decisions.
As industry thought leaders, our people deliver innovative thinking and excellent service to global organizations and local clients worldwide. We work in partnership with our clients, meeting their needs for high-quality information, analysis and foresight across our network of more than 70 countries.
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