December same-store sales growth weakened to 0.2% from the prior month and the prior year for about 50 retailers reporting monthly results (pdf) – also down from a 3.5% sales-weighted composite reported the previous month and down from the 3.2% composite reported in Dec. 2006, TNS Retail Forward reported last week.
“The retail numbers leave little doubt that shoppers are in belt-tightening mode. No part of retail spending is immune right now. From stores to online retailers and lower-income to higher-income shoppers, there are signs of weakness that will persist into 2008,” said Frank Badillo, senior economist and director of the Retail Forward KnowledgeBase.
The Department Stores and Apparel and Accessory Stores categories registered big declines in the composite results by channel. Discount Department Store and Drug Stores managed slight-to-modest increases. Warehouse Clubs represented the only line of trade with a strong increase.
The December numbers reflect the weak shopper sentiment in TNS Retail Forward’s December ShopperScape survey. Below, the survey data released by TNS Retail Forward.
Shoppers estimate that they cut back on their holiday spending compared with last year – and did so across a range of categories:
- ShopperScape survey findings from the few days directly following Christmas before New Year’s Eve show the same percentage of shoppers buying holiday gifts this year as last year, but shoppers estimate that they spent less than last year – $635 on average this year vs. $710 on average last year:
- Not surprisingly, the percentage of shoppers buying pre-recorded media continues to decline (-4 percentage points) as more consumers turn to iTunes and other alternatives; see table of types of gifts:
- Home decor or home-related furnishings were hurt, in part, by a weak housing market. The category suffered a three percentage point decline in terms of the percentage of shoppers buying holiday gifts in the category.
- Personal care or beauty items dropped 3 percentage points in terms of the share of shoppers buying gifts in the category.
- Toys/dolls/games (up 2 percentage points) and video games/gaming systems (up 1 percentage point) were the rare winners among categories.
Retail stores cannot necessarily blame online retailing for luring away shoppers. Online shopping was also not as robust as prior years, according to the December ShopperScape survey:
- Fewer shoppers (82%) this holiday season said they shopped online for gifts vs. last year (88%). And the percentage of purchasers online (77%) declined slightly from last year (80%):
- Online spending estimates dipped slightly to $262 on average compared with $272 last year:
- Up Market shoppers spent $344 online on average – well above what Down Market and Middle Market shoppers spent online.
Meanwhile, gift cards may not necessarily be the salvation of post-holiday shopping. The percentage of household receiving cards and the estimated value of those gift cards declined compared with last year, according to the December ShopperScape survey:
- Primary shoppers getting gift cards as presents reported receiving an average $124 worth of them – slightly below last year’s report of $136 on average. 56% of households received gift cards, compared with 58% last year:
- Up Market households fared much better in the gift card department. Almost two-thirds of them received gift cards at an average value of $171.
- Types of gift cards received this holiday season did not vary much from last year with one notable exception. The percentage of households receiving restaurant/coffee shop gift cards plummeted from 31% in 2006 to 23% in 2007:
- Differences among income market segments show Down Market consumers much more likely to have received Wal-Mart gift cards than any other type of gift card.
- In contrast, Up Market recipients got more restaurant/coffee shop, book and media store and Target gift cards than any other types of gift card.
About the data: The TNS Retail Forward ShopperScape survey is conducted online each month with a sample of 4,000 US primary household shoppers, among a nationally representative sample of households. This month’s survey was conducted during the last week of December 2007.