Where Is Spending Slowing Most?
by Toby Smith 02/23/09
ChangeWave's February survey results point to yet another leg down in U.S. consumer spending going forward.
New record lows for a ChangeWave survey have been recorded in consumer electronics spending and restaurant spending. Durable goods for the home have also taken a big hit.
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Interestingly, for the second survey in a row, we've picked up stabilization in household repairs/improvements spending. One explanation for this may be that some consumers made home improvements their New Year's resolution.
Retail Store Trends
Our latest survey results show the United States has hit the point in the recessionary cycle where even the mightiest of retailers are being brought to their knees.
Case in point: Costco (COST), which has already experienced a significant drop in its growth rate in recent months. Nonetheless, the plunge during the past month (-5) appears particularly unnerving, and is the biggest downward move we've seen so far for Costco.
Wal-Mart (WMT) has performed admirably during most of this same time period, but it too appears to be hitting a wall going forward. Only 13% of consumers said they'll spend more at Wal-Mart, while 11% said less, which is a four-point plunge since January.
Not surprisingly, the greatest weakness going forward is among traditional retailers -- led by Macy's (M) (-13) and Sears (SHLD) (-13). Target (TGT) (-10) has also taken a huge hit in recent weeks, falling three points.
Home Entertainment Shopping
On the home entertainment front, even as Circuit City (CCTYQ) (down four points to 3%) sells off its remaining inventory, Best Buy (BBY) (unchanged with 38%) continues to show few signs of any windfall from the shutdown of its rival. Its market share remains significantly below that of a year ago (-7).
Apple (AAPL) (down two points to 9%) and Target (down two points to 6%) have also experienced declines since January in the home entertainment market.
Amazon.com (AMZN) (25%), however, continues to hold its own, up one point from previously.
Toby Smith is the founder and editor of ChangeWave Investing and ChangeWave Inner Circle. Read his bio here.
The ChangeWave Alliance Research Network is a group of 20,000 highly qualified business, technology and medical professionals -- as well as early adopter consumers -- who work in leading companies of select industries. ChangeWave surveys its network members weekly on a range of business and consumer topics, and converts the information into a series of proprietary quantitative and qualitative reports.
