Frugal Shoppers May Be Here To Stay
As if the retail sales reportwasn't depressing enough, it looks like our newfound frugality might not be just the latest fad.
Retail Forward is out with a survey that spells more bad news for women's apparel retailers, particularly for those who cater to those who have champagne wishes and caviar dreams.
More than eight out of every 10 women have changed the way they shop for clothing, accessories, and shoes, according to the market researcher's latest ShopperScape survey.
These changes include spending less on clothing, accessories, and shoes; shopping less frequently for these items; and buying fewer items on impulse, as well as looking harder at the clearance rack or avoiding items that seem "just too expensive."
This might not sound too surprising for those who have been watching sales at women's apparel retailers over the past few months. Losses there have been mounting.
Still, the survey highlights how pervasive these behaviors are, and how ingrained they are becoming.
"Retailers are going to have to come to terms with the fact that these behaviors are likely to be a little more long-lasting," said Kelly Tackett, a senior consultant with Retail Forward.
For example, 30 percent of those surveyed said they were "extremely likely" or "somewhat likely" to avoid buying items that seem "too expensive" even after the economy rebounds.
"Women are forgoing things that they believe are too expensive in a shift toward items with more perceived value," Tackett said. "That is going to have pretty substantial repercussions for the luxury industry, which has been one of the high-flyers of the last cycle."
With shoppers likely to be more discerning, retailers are going to have to adjust what they are selling to meet these needs, Tackett said. What's more, she suggests, women may be satisfied with the clothes and accessories they are finding at discounters and off-price and outlet stores.
The trends in this survey certainly look like they are being backed up by the results out from retailers such as Liz Claiborneand Ann Taylor
"We see the environment as still fundamentally promotional, with a reserved consumer and significantly reduced traffic," said Liz Claiborne Chief Executive William McComb told investors on a conference call.
Liz Claiborne shares plunged Wednesday after its loss widened more than expected.
Liz Claiborne, whose brands include Juicy Couture and Kate Spade, posted a net loss of $91.4 million, or 97 cents a share, for the first quarter ended April 4, compared with a loss of $31.02 million, or 33 cents a share, a year earlier. Excluding one-time items, the loss was 37 cents a share, much worse than the loss of 22 cents a share that analysts were expecting. Sales fell nearly 29% to $779.7 million.
The news was somewhat better at Ann Taylor Stores. Although sales continue to struggle, its gross margins are improving due to cost cuts and inventory controls, and it said Wednesday its loss in the first quarter will be narrower than analysts are expecting.
Macy's also reported its results Wednesday. Department store chains have been among the hardest hit in the retail downturn. Although Macy's managed to report better-than-expected results, it left its full-year forecast unchanged, citing the continuing economic uncertainty.
More from Consumer Nation:
- Recession Wilting Mother's Day Gifts
- Seven Things We're Still Doing Despite The Recession
- Pepsi's Challenge: What's The Right Price?
- The Economy's Other Green Shoots: A Gardening Boom
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