525d673c10af65 78702757

© ALL R IGHTS RESERVED 2013

IN THIS ISSUE OF THE PULSE:

CONFIDENCE ! SPENDING

Shoppers’ confidence in their finances is rising!

»!!but only a select few are increasing spending

»!!men, millennials, multi-cultural, and the affluent

SEE PAGE 7

JUNE 17 , 2013

2 © ALL RIGHTS RESERVED 2013

»! Holding steady at less than 30% are the people who are seeing improvement in finances – their personal finances or the country’s economy.

»! However the fear that led shoppers to cut back spending has relaxed for many. •! There has been a steady reduction in the percent of

people who are cutting their spending or postponing major purchases. Both measures are now below 40%.

»! The majority have also accepted higher gas prices with only " cutting spending because gas is almost $4/gallon.

These confidence trend measures show that consumers have settled into the new financial reality – which is stuck at low levels of optimism.

SPENDING OUTLOOK CONTINUES TO IMPROVE

(SEE APPENDIX TABLE 1A)

CONSUMER CONFIDENCE & SPENDING MINDSET TOTAL

JULY 2009

AUG. 2010

JULY 2011

SEPT. 2012

APRIL 2013

Base: Total Respondents 1501 1520 1501 1502 1521 V W X Y Z % % % % %

CONFIDENCE

Believe household's financial situation will improve over next year

35 WXYZ 29 27 28 28

Believe the economy, in general, has improved over past six months 13 X 16 VX 9 20

VWX 22

VWX

Household's financial situation has improved over the past year 11 12 13 16

VWX 19!

VWXY

Concerned that I, or another member of household, may lose job/be laid off in next six months

24 WXYZ 16 YZ 15 13 13

SPENDING Cutting back on spending because just not sure what will happen next with the economy

57 WYZ 51 YZ 56

WYZ 45 Z 37

Postponing major purchases 49 WXYZ 41 YZ 43 YZ 33 31

Cutting back on spending when shop because of gas prices 30 30 40

WVYZ 32 Z 27

In the last year, started putting more money into savings account 20 WZ 16 18 19 W 17

Q. Please indicate which, if any, of these statements describe your current economic status. How America Shops® The PULSE of Shopping Life Report is based on a national Internet

survey conducted in April, 2013 CONFIDENCE ! SPENDING | JUNE 17, 2013


There are significant differences in confidence and spending outlook by gender, age, income and ethnic groups. »! Men have a more optimistic economic outlook than Women, concerning both their household and the

economy at-large. »! African American shoppers have a more positive outlook than other ethnicities. »! Compared to other age groups, Boomers are more likely to be restricting their spending, while Millennials are

more likely to be putting money aside.

»! Those with the least restrictions on their spending are the affluent, which means a HHI of $100k+, but they are also the biggest group of savers, which limits their spending.

WILLING TO SPEND? IT DEPENDS ON WHO YOU ARE

Q. Please indicate which, if any, of these statements describe your current economic status. How America Shops® The PULSE of Shopping Life Report is based on a national Internet survey

conducted in April, 2013 CONFIDENCE ! SPENDING | JUNE 17, 2013

(SEE APPENDIX TABLE 1A)

CONSUMER CONFIDENCE & SPENDING MINDSET TOTAL GENDER AGE INCOME ETHNICITY

APRIL 2013 Men Women Millennial Gen X Boomer Senior <$50K $50k-

$99K $100K+ Caucasian Hispanic African American

Base: Total Respondents 1521 737 784 365 455 571 130 747 558 216 1006 203 206 Z A B C D E F G H I J K L % % % % % % % % % % % % %

CONFIDENCE Believe household's financial situation will improve over next year 28 31 B 26 32 F 29 F 27 21 28 28 29 26 29 43 JK

Household's financial situation has improved over the past year 19! 21 17 22 19 17 18 18 19 24 G 18 19 24

SPENDING Cutting back on spending because just not sure what will happen next with the economy

37 31 43 A 33 34 42 CD 38 41 HI 35 I 27 40 L 33 31

Postponing major purchases 31 29 34 A 29 27 36 CD 32 35 I 32 I 18 33 29 28 In the last year, started putting more money into savings account 17 18 16 22 EF 17 14 13 15 17 24 GH 16 21 15


In spite of their improved confidence, 69% of shoppers say they have not recently increased spending in the categories they cut back during the recession.

»! Depending on the category, one-quarter to half of shoppers cut their spending during the recession to save money; but no more than 12% have increased their spending in the last 6 months.

»! Looking at different demographic groups shows who is more willing to up-spend now, but even among them the highest percentage is 34% for going out

CONSUMER CONFIDENCE TRICKLE DOWN TO CATEGORIES?

Q. During the economic slowdown/recession did you cut back your spending in any of the following categories? In the last six months, have you increased your spending in any of the following

categories? How America Shops® The PULSE of Shopping Life Report is based on a national Internet survey conducted in April, 2013

CONFIDENCE ! SPENDING | JUNE 17, 2013

(SEE APPENDIX TABLE 2A & 3A)

SPENDING BY CATEGORY CUTTING BACK IN RECESSION

INCREASED IN PAST 6 MONTHS

Base: Total Respondents % %

Meals at restaurants 47 9

Fashion (net) 46 11

–! Clothing 38 9

–! Fashion accessories 30 4

Electronics and Wireless (net) 34 11

–! Electronics (TV’s, etc.) 27 6

–! Wireless mobile services 14 6 –! Wireless devices, such as cell

phones or tablets 13 5

Home furnishing and appliances 30 5

Health and Beauty (net) 25 7

–! Cosmetics (Women only) 24 4

–! Facial skin care 13 4

–! OTC medication 11 3

Premium cable TV 23 5

Food 20 12

Gym membership 18 4

Pet food and supplies 7 6

None of the above 31 69


Although the numbers of shoppers increasing their spending are generally low, gender, age, income and ethnicity groups have different spending patterns.

»! More Men have increased spending than Women. »! Millennials are increasing their spending the most, followed by Gen Xers and Boomers. »! As expected, Higher income shoppers ($100K+) are most likely to have increased spending in most categories. »! Consistent with their better outlook, African American, along with Hispanics, are increasing their spending more.

TARGET THE SHOPPERS WHO ARE INCREASING SPENDING

Q. In the last six months, have you increased your spending in any of the following categories? How America Shops® The PULSE of Shopping Life Report is based on a national Internet survey

conducted in April, 2013 CONFIDENCE ! SPENDING | JUNE 17, 2013

SPENDING MORE BY CATEGORY (select categories) TOTAL GENDER AGE INCOME ETHNICITY APRIL 2013 Men Women Millennial Gen X Boomer Senior <$50K $50k-

$99K $100K+ Caucasian Hispanic African American

Base: Total Respondents 1521 737 784 365 455 571 130 747 558 216 1006 203 206 A B C D E F G H I J K L

% % % % % % % % % % % % %

Food 12 13 11 18 E 14 E 8 12 13 11 14 9 20 J 17 J

Electronics and Wireless (net) 11 14 B 9 17 EF 14 EF 8 F 2 8 12 G 21 GH 10 13 14

Fashion (net) 11 13 B 10 19 DEF 13 E 6 8 10 11 18 GH 9 17 J 14

Meals at restaurants 9 11 B 7 15 DEF 9 6 5 7 9 14 G 6 15 J 10

Health and Beauty (net) 7 7 8 14 DEF 8 E 4 5 7 8 10 5 11 J 11 J

Pet food and supplies 6 6 5 9 DEF 5 F 4 2 5 5 8 5 7 5

Premium cable TV 5 7 B 2 8 DEF 5 F 3 F 1 4 4 7 4 4 4

Home furnishing and appliances 5 5 4 8 DEF 4 F 3 2 4 5 6 4 4 7

Gym membership 4 5 B 3 7 E 6 E 1 3 3 4 7 G 3 5 7 Didn’t increase spending in these categories 69 66 71 A 53 67 C 77 CD 78 CD 70 I 69 62 73 KL 59 65

(SEE APPENDIX TABLE 3A FOR ALL CATEGORIES)


During the recession, 3/4 of consumers changed how they shop in order to spend less, and now they are sticking to these money-saving strategies – selectively.

»! During the recession, 49% of shoppers started searching for more coupons and discounts, and 45% plan to continue to do so in the future.

»! Other common strategies to save are focused on resisting temptation, that is, doing less shopping trips, buying less expensive brands and staying out of expensive stores. For each of these strategies we see about a 10 point drop in those who will continue.

FRUGAL SHOPPERS WANTING TO BE TEMPTED TO SPEND

Q. During the economic slowdown/recession, did you make any of the following changes to the way you shop? Which of these changes will you continue to do in the future? How America Shops® The PULSE

of Shopping Life Report is based on a national Internet survey conducted in April, 2013 CONFIDENCE ! SPENDING | JUNE 17, 2013

(SEE APPENDIX TABLE 4A & 5A)

LOOK FOR COUPONS/DISCOUNTS

GO SHOPPING

LESS

STICK TO SHOPPING

LIST

BUY LESS EXPENSIVE

BRANDS

STAY OUT OF EXPENSIVE

STORES

BUY MORE PRIVATE/

STORE LABEL

RESIST STOCKING UP

SALES

49% 45%

39%

27%

38% 32%

35%

26%

35%

27% 29%

22%

7% 13%

HABITS CHANGED IN RECESSION

CONTINUE TO DO

•! In keeping with their lower confidence levels, Women, Boomers and Lower income shoppers are more likely to use, and continue to use money-saving strategies.

DEMOGRAPHIC CALLOUT

SHOPPING STRATEGIES IN THE RECESSION

Base: Total Respondents


!

Men, Millennials, African Americans and Hispanics increased their spending in the last 6 months for Food and HBC

It’s a good sign that fewer shoppers are trading down to lower priced brands and private label! the “race to the bottom” is easing

With a bit more confidence and cash, shoppers are coming back to taking advantage of the sales to load up their pantries

Finding coupons and chasing discounts are here to stay

Create targeted shopper marketing programs aimed at these 4 key groups who are willing to spend more in your category Think about how to bring shoppers back to your more premium priced items now that trading up is slowly re-emerging

Consider retailers where multi-item merchandising can increase sales and drive the basket ring

Make coupons and discounts available everywhere shoppers look for them from the traditional circular to mobile alerts in-store

INSIGHTS ACTIONS

CONFIDENCE ! SPENDING | JUNE 17, 2013


APPENDIX TABLES TABLE 1 CONSUMER CONFIDENCE & SPENDING MINDSET »! A: By Demographics

»! B: By Retailer Shoppers

TABLE 2 CUTTING BACK IN RECESSION BY CATEGORY »! A: By Demographics »! B: By Retailer Shoppers

TABLE 3 INCREASED SPENDING IN LAST 6 MONTHS BY CATEGORY »! A: By Demographics »! B: By Retailer Shoppers

TABLE 4 SHOPPING STRATEGIES CHANGED DURING RECESSION »! A: By Demographics »! B: By Retailer Shoppers

TABLE 5 SHOPPING STRATEGIES THAT WILL CONTINUE TO USE »! A: By Demographics »! B: By Retailer Shoppers

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