The Conference Board said this morning that its Consumer Confidence Index plunged 12% in January to the lowest level since November 2011. Lynn Franco, Director of Economic Indicators at The Conference Board, said:
"Consumer Confidence posted another sharp decline in January, erasing all of the gains made through 2012. Consumers are more pessimistic about the economic outlook and, in particular, their financial situation. The increase in the payroll tax has undoubtedly dampened consumers’ spirits and it may take a while for confidence to rebound and consumers to recover from their initial paycheck shock."Redbook Research reported that chain store sales rose just 1.9% year-over-year in January (relative to a target of a 2.3% gain), and fell 0.5% compared to December (relative to a target of a flat reading). The report noted that some stores are transitioning from winter to spring merchandise more gradually than usual "given the increasing unwillingness of shoppers to buy ahead of need; this may mean a slow start to the spring season."
Meanwhile, the International Council of Shopping Centers said chain store sales increased just 2.0% in the latest week, the slowest pace in 11 weeks, while sales fell 1.0% from the prior week.
"Temperatures were sharply colder this past week than last year, which may have helped the clearance of seasonal apparel, but it also seemingly held back the consumers spending in most segments,” said Michael Niemira, ICSC's vice president of research and chief economist. "In addition, higher fuel prices for the week, the backdrop of higher payroll taxes and little incentive to shop during this seasonally slow period, gave consumers the excuse to spend less both sequentially and on a year-over-year basis."Retailers should get a sales bump in the upcoming week - Redbook said "With the Super Bowl on February 3rd, big discounters are gearing up for promotions on food, beverages and big screen TV's." The National Retail Federation expects consumers to spend $12.3 billion on televisions, snacks, décor and athletic apparel for the big game this year, up from $11.0 billion last year.
We will get a much better read on January sales when 20+ chains report monthly results on February 7th, and quarterly earning start rolling in mid to late February.
Tuesday Retail & Consumer Reads:
- Why couch commerce will thrive in 2013 (Mobile Commerce Daily)
- Is There a Future for Same-Day Delivery? How About Online Grocery Shopping? (Time)
- Consumer Confidence in U.S. Falls to Lowest Level Since 2011 (Conference Board)
- Top 10 Retailers to Work For (RISNews)
- Jos. A Bank's "buy one, get seven free" business model shows signs of cracking (Business Insider)
- How retailers will invest now for Holiday ‘13 (Shop.org)
- Why Latinos Are Leading Retail Trends (ClickZ) and Hispanics' Shopping Activity Reflects Digital Affinity (eMarketer)
- Retail Wisdom: Lessons Learned From Holiday 2012 (Forbes)
- Will Robots be the New Retail Store Associates? (Robin Report)
- Can Celebrities Reverse the Fortunes of Struggling Brands? (MarketWatch)
- Advertisers Clicking Buy Button on Google Shopping Ads (Adweek)