New York—February retail comparable store sales were up last week as has been consumer confidence, but in its latest report “Moving On 2012, ” the latest in a series “How America Shops Megatrends, WSL/Strategic Retail, many consumers continue to behave as if they are in a recession.
A shocking 52% said they were struggling to afford the necessities, “and for many even that is a stretch,” reports WSL, which tracks shopping behavior and retail trends.
“There is a huge fundamental issue when more than half of Americans can only afford basic necessities and people who earn up to $150,000 think they are poor,” said Wendy Liebmann, WSL Strategic Retail’s ceo.
“Look, American shoppers are moving on and coming back to shopping, but at their own pace. As a result, retail sales are precarious and likely to fluctuate up one month, down the next. That’s not going to change any time soon. Brands and retailers cannot ignore this. They will need to re-think the way they do business over the next three to five years – or longer,” Liebmann said.
‘Youth Market Has Dried Up”
Among the “Moving on 2012” findings:
● The youth market is no longer a golden ticket for retailers. In fact, 18 to 34 year olds have the highest percent of those who do not have enough money to cover their basic needs, with close to 24% in financial turmoil. Compared with people over 35, who were able to launch their careers 10 years ago, when times were good, this group is a long way from recovery, “compelling retailers targeting this group to seriously rethink their strategies.”
● Branded products are under threat since shoppers continue to place a greater focus on price. About two thirds (67%) of women agree that trusted brand names are not worth paying more for. More than a quarter (26%) of women admit that while they used to buy brand names they could not afford, they are no longer dong so. That’s up 7 percentage points from 2010.
● Even those with six-figure incomes are struggling. WSL says that it takes “a significantly higher income to feel financially secure in this economy, with nearly 30% of Americans in the $100,000 to $150,000 income bracket claiming they can only afford the basics. Once considered affluent, “six-figure income shoppers are now identifying themselves as middle-income.”
● A whopping 75% of women now say it’s important get the lowest price on everything they buy, up 12 percentage points from 2008 and up 22 percentage points from 2004.
Some old and new methods of ensuring they get the lowest price include:
• 68% regularly use coupons to reduce costs, up 7 percentage points from 2010.
• 45% claim they only buy items that are on sale, also up 7 percentage points
• 43% make a point to search online for store discounts before they shop, up 10 percentage points
• 14% of women say they use their mobile phones while in store to see if they can find a lower price, before they buy.
• Managing their aspirations by sticking to brands and stores they can afford: 58% of all shoppers agreed; 36% of those with household incomes of $150,000 or more, also agreed.
• Staying out of stores where they might be tempted to overspend: nearly half, 48%, said they did. Of those with household incomes of $150,000 or more, 28% agreed.
• Buying less when they go shopping? 43% of all shoppers agreed. Those with household incomes of $150,000 or more, 26% agreed.
“The youth market, which has traditionally been known for its enthusiastic spending of discretionary income, has virtually dried up,” added Candance Corlett, WSL’s president. “As today’s young adults struggle to find employment and pay down student loan debt, this demographic now represents the largest percentage of Americans who are challenged to afford even basic necessities.”
WSL/Strategic Retail conducted an internet survey from December 1 to 12, 2011. The survey included 1,950 respondents drawn from a nationally representative online same.
For more information, visit www.wslstrategicretail.com.