STORES Magazine - July 2008 - (Page 12)

CONSIDER THIS / PRESIDENT’S PAGE Feeling Consumers’ Pain BY TRACY MULLIN The Voice of Retail Worldwide STORES is published by NRF Enterprises Inc., a subsidiary of National Retail Federation Inc., 325 7th St. NW, Washington, D.C. 20004. (202) 783-7971 FAX (202) 737-2849 t’s hard to escape the talk of how the rising cost of fuel is affecting Americans’ way of life, and there is certainly no question that gas prices are causing many consumers to postpone purchases, forgo that morning cup of coffee or change their commutes. Passing the $4-per-gallon mark got me wondering how people are adjusting, so I asked our friends at BIGresearch to do a bit of digging. There is no doubt that higher gas prices are impacting more Americans than ever before. According to BIGresearch, 86 percent of people are making adjustments to their lifestyles as a result of higher fuel costs, up from 76 percent at the same time last year. Understanding their customers can help retailers power through a tough economic environment. Research tells us that Americans are on edge about almost everything. One in 10 shoppers is either concerned about being laid off or has a family member who has been laid off. Employment uncertainty, coupled with higher gas and food prices, is affecting consumer confidence. Only onethird of people feel confident investing in the stock market right now, and just one in five feels that the economy will recover in the next six months. To compensate, consumers continue to make changes to their spending. More than half of Americans say they are focusing on their needs instead of wants, with many also becoming more practical and realistic in purchases. This explains why the number of people who say they are reducing dining out and cutting back on vacation and travel has jumped from last year’s levels, as has the number who say they’re delaying a major purchase. Shoppers’ behaviors have also changed, as half of consumers are taking fewer trips to the store and shopping closer to home. They are also leveraging the Internet: More than 90 percent of shoppers say they research products online before buying in a store, and they are using the web to find store locations, hours and merchandise availability to prevent a wasted trip in the car. While some of this belt-tightening is working, shoppers are having a hard time keeping their heads above water. Many admit to putting more necessity purchases, like gasoline, prescriptions and health care, on credit cards this year and 20 percent of shoppers have credit card balances of more than $5,000. Consumers’ frustration over gas prices and increased economic uncertainty should raise a red flag on Capitol Hill, as Americans say they are planning to make their voices heard this fall. According to BIGresearch, 88.7 percent of people plan to vote in November, up from the 82.3 percent who said they voted in the last Presidential election. The mood of the American consumer is sobering. Retailers should do their very best in this challenging environment to understand and empathize with customers’ concerns. By knowing more about shoppers’ mindsets, companies will be better equipped to ride out this storm. I CHAIRMAN OF THE BOARD Myron E. Ullman, III, Chairman, President and CEO, J.C. Penney Co. VICE CHAIRMEN Philip L. Francis, Chairman and CEO, PetSmart, Inc. Stephen I. Sadove, Chairman of the Board and CEO, Saks Inc. PRESIDENT & CEO Tracy Mullin SENIOR VICE PRESIDENTS Denise Brasse, Industry Relations Mallory B. Duncan, General Counsel Michael G. Gatti, Communications David Hogan, CIO Carleen C. Kohut, Finance & CFO Steven J. Pfister, Government Relations NRF Divisions Association for Retail Technology Standards EXECUTIVE DIRECTOR Richard E. Mader (202) 626-8140 National Council of Chain Restaurants PRESIDENT John R. (Jack) Whipple (202) 626-8183 FAX: (202) 626-8185 Retail Advertising & Marketing Association EXECUTIVE DIRECTOR Michael G. Gatti (202) 626-8117 FAX: (202) 737-2849 EXECUTIVE DIRECTOR Scott Silverman (202) 626-8192 FAX: (202) 626-8191 325 7th Street, NW Suite 1100 Washington, D.C. 20004 All articles published in this magazine represent solely the individual opinions of the writers, and not necessarily those of the National Retail Federation. 12 STORES / JULY 2008 WWW.STORES.ORG http://WWW.STORES.ORG

Table of Contents for the Digital Edition of STORES Magazine - July 2008

STORES Magazine - July 2008
Executive Editor's Page
President's Page
Dearth of Retail Creativity
What Shoppers Think
Wow, Is That a Wawa?
10 Things You May Have Missed
Numbers Worth Counting
Full Price/Markdown
Retail People
Merchandising Strategy
Point of Sale
Human Resources
Top 100 Retailers
Store Design
IT Operations
Systems Managements
LP Vantage Point
Cover Story
Emergency Response Systems
Background Checks
LOEB Retail Letter
Point of View
NRF News
Retail Crossword
Retail Industry Calendar
Last Laugh

STORES Magazine - July 2008