Columbus, Ohio — Same-store sales growth weakened to 1.3 percent in September as shoppers gave new signs of the extent they plan to cut back for the holidays, TNS Retail Forward reports.
September’s result for about 40 retailers reporting monthly sales is down from a 2 percent sales-weighted composite reported last month and the same as the 1.3 percent composite reported in September of 2007.
“These latest signs from retailers and shoppers are leaving little doubt that the coming months will be the weakest spending environment that the U.S. economy has faced in at least 17 years,” said Frank Badillo, senior economist at TNS Retail Forward.
September’s results were led by stronger-than-average results at warehouse clubs and drug stores. (For a list of the retailers reporting and their results, please follow this link: www.retailforward.com/retailintel/samestr_sales.pdf »http://www.retailforward.com/retailintel/samestr_sales.pdf.)
Although TNS Retail Forward’s ShopperScape survey polled shoppers before the financial crisis deteriorated at the end of September, the survey nevertheless shows that shoppers are stepping up their plans to cut back on the holidays.
According to the ShopperScape survey, nearly four of every 10 shoppers (37 percent) plan to spend less on the holiday than they did last year. That represents an increase of 10 percentage points.
The planned spending cuts are skewed toward down- and middle-market shoppers — 38 percent or more of them plan to spend less on the holiday compared with 32 percent of up-market shoppers.
Only 13 percent of shoppers plan to spend more than last year. Surprisingly, that represents a slight increase from last year.
The spending cutbacks planned by shoppers are skewed toward holiday trimmings while gifts for immediate family are somewhat safer, according to the ShopperScape survey.
Among the least vulnerable to holiday cutbacks will be gifts for children and spouses/partners. Slightly less than one-fifth of shoppers plan to cut back in each of those cases.
Gifts for friends and relatives outside the immediate family are also likely targets for less spending by households.