Retail Forward’s monthly Future Spending Index and ShopperScape report both suggest that retailers are in for toughening times in coming days, with economic realities inhibiting shoppers’ willingness to venture into stores.
“As we head into the second half of the year, the economic pressures consumers face are becoming more difficult to ignore,” said Steve Spiwak, an economist with Retail Forward. “In particular, the drag of debts amid rising interest rates is taking a bigger toll on household cash flow. The recent stock market downtrend and concerns about income growth also are crimping the desire to spend.”
According to the studies, “the longer-term trend toward fewer shopping trips continues, likely in response to rising gasoline prices and increasing time pressures. This trend is benefiting retailers with a broad offer that enhances one-stop shopping convenience, though favored higher-end retailers may also benefit as many shoppers trade down to make room in budgets to trade up.”
Almost six out of ten consumers tell Retail Forward that they have changed their shopping habits to some degree over the past year – with less frequent shopping trips a common theme to almost all their comments.
Interestingly, the Future Spending Index points to a downward trend in both up-market and middle-market households, but sees an upward trend in down-market households – “boosted by a pickup income growth and a jump in refinancing activity, which allows homeowners to tap into home equity to fuel spending.” Still, the report says that “jitters persist regarding job market security and investment worth, which should restrain any improvement in Down Market spending this month.”
“As we head into the second half of the year, the economic pressures consumers face are becoming more difficult to ignore,” said Steve Spiwak, an economist with Retail Forward. “In particular, the drag of debts amid rising interest rates is taking a bigger toll on household cash flow. The recent stock market downtrend and concerns about income growth also are crimping the desire to spend.”
According to the studies, “the longer-term trend toward fewer shopping trips continues, likely in response to rising gasoline prices and increasing time pressures. This trend is benefiting retailers with a broad offer that enhances one-stop shopping convenience, though favored higher-end retailers may also benefit as many shoppers trade down to make room in budgets to trade up.”
Almost six out of ten consumers tell Retail Forward that they have changed their shopping habits to some degree over the past year – with less frequent shopping trips a common theme to almost all their comments.
Interestingly, the Future Spending Index points to a downward trend in both up-market and middle-market households, but sees an upward trend in down-market households – “boosted by a pickup income growth and a jump in refinancing activity, which allows homeowners to tap into home equity to fuel spending.” Still, the report says that “jitters persist regarding job market security and investment worth, which should restrain any improvement in Down Market spending this month.”
- KC's View:
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We know that a lot of people seem to think that the economy is just humming along, but our worries about the economy tend to be confirmed by these Retail Forward conclusions. We are concerned that the economy is a kind of house of cards, and could be brought down very quickly by unforeseen events. There are an amazing number of people out there who we know personally who are worried about their companies, worried about their jobs…and frustrated because simply working harder and working better doesn’t seem to do anything to alleviate their stress levels.
