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Same-Store Sales Weaken as Consumer Spend Slows

August same-store sales growth weakened to 2.0 percent over the year-earlier period for about 40 retailers reporting monthly results (pdf) on Thursday, TNS Retail Forward reports (via Retailer Daily).

August's result is down from the 2.8 percent sales-weighted composite reported last month and down from the 3.1 percent composite reported in August of 2007.

August's results were led by stronger-than-average results at Warehouse Clubs, which were pumped up by gasoline sales. Retailers in all other channels lagged, with the exception of Wal-Mart, dollar stores and a few apparel specialty retailers.

"Retail sales are being hurt by shoppers spending less on back-to-school and by the diminishing impact of tax rebates," said Frank Badillo, senior economist at TNS Retail Forward. "The signs suggest that retail spending will resume a weakening trend through the end of the year."

August same-store sales results were dampened by shoppers' weak back-to-school spending plans, according to the TNS Retail Forward August ShopperScape survey:

tns-retail-forward-back-to-school-spending-plans-august-2006-august-2008.jpg

  • In August, one of every five households (20 percent) planned to spend less on back-to-school, which was significantly more belt-tightening than in the prior two years.
  • About two of every five households (41 percent) planned to spend the same as last year on back-to-school, also a significant deterioration from last year (46 percent).
  • The good news was that about one-third of households (34 percent) planned to spend more than last year, which was only slightly less than last year (36 percent).

ShopperScape survey results also suggest that a weakening trend may have resumed in August following a July pause in response to tax rebates and back-to-school spending:

tns-retail-forward-shopperscape-spending-plans-august-2008.jpg

  • The percentage of shoppers planning to spend less during the next month jumped to 53 percent in August, resuming a steady upward trend evident from February through June.
  • The percentage of shoppers planning to spend more (8 percent) or about the same (39 percent) as last year slipped to new lows for the year after momentarily rising in July.

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