With American consumers reluctant to pry open their wallets for retail spending, a greater percentage plan to spend more at longtime discount giant Wal-Mart than at Target, a new survey finds.
Target, which has built its business on being the trendier discounter in a sea of bland big-box rivals, is quickly losing ground to Wal-Mart, the company that recession-stricken consumers apparently consider a place to save money, according to findings from The Gordman Group’s Retail Trend Tracker survey conducted in April.
The survey did not look specifically at jewelry, but focused on apparel and home furnishings buyers. However, an increase in the number of shoppers heading to Wal-Mart for any reason is significant, because in terms of sales volume, Wal-Mart has been the leader in retail jewelry sales for years, even though the jewelry and watch sales category is estimated to only represent about 4 percent of Wal-Mart’s overall U.S. retail sales. In National Jeweler’s $100 Million Supersellers ranking, based on sales volume, Wal-Mart came in at No. 1 in 2008 while Target was 13th on the list.
The survey results showed that 55 percent of consumers anticipate spending more of their budget at Wal-Mart, and 21 percent expect to spend a smaller share there, giving Wal-Mart a net gain of 34 percent. By contrast, 25 percent of those surveyed expect to spend a larger share of their budget at Target, and 22 percent expect to drop fewer dollars there, for a 3 percent overall uptick. This is a dramatic increase in Wal-Mart’s favor from the 2009 Consumer Intention Study conducted in December 2008, according to The Gordman Group.
Additional findings from the study include the following:
— While 45 percent of consumers reported spending less in the past three months, only 31 percent expect to spend less in the next three months, even though 59 percent of those surveyed believe the U.S. economy is getting worse.
— Only 49 percent said the economy has affected them directly, but an additional 28 percent have been scared by news on the U.S. economy.
— Eighty percent of those surveyed reported that the current economic conditions have had some effect on where they shop.
— Ninety percent of those surveyed reported that the economic conditions have affected how much they have spent.
— Thirty-five percent of consumers identify price or sale price as the factor that most influences their purchase behavior, and another 38 percent identify style, quality and having what they want as the primary drivers.
The Gordman Group Retail Trend Tracker Survey was conducted through online interviews during the first week of April, with 526 consumers who were identified as the primary apparel and home furnishings shoppers for their families. Consumers answered questions designed to provide insight into how the current economic environment continues to affect how much they spend and where they shop. All store data was collected by specific store name, catalog or Web site.