Download pdf - June 2011 BIG Call

The BIG CallJune 2011

Pam Goodfellow, Senior Analyst, BIGresearch

Guest Contributor:

John Mariotti, President & CEO, The Enterprise Group

presented by: 400 W. Wilson Bridge Rd.

Suite 200

Worthington, OH 43085

Ph: 614-846-0146

[email protected]

© 2011, Prosper®

John Mariotti, President/CEO & Founder of

The Enterprise Group

• Director on corporate boards including:

• World Kitchen Inc.

• MCM Capital

•Previously:

• President of Rubbermaid Office Products Group

• President of Huffy Bicycles

• Award-winning author of The Complexity Crisis

• Author of nine business books

• Writing THE ENTERPRISE, a weekly newsletter & blog, since 2001

• Writing a weekly blog for American Express Open Forum

• Writing a weekly blog for FORBES/Prosper Now

• Advisor to several well-known companies

• Articles and interviews about his business successes have appeared in The Wall

Street Journal, Fortune, Business Week and many more publications

• Guest on CNBC's Today's Business and Power Lunch shows and a panelist on

MSNBC’S Your Business

© 2011, Prosper®

Consumer Intentions & Actions: June

Disclaimer: BIGresearch® makes no warranties, either expressed or implied, concerning: data gathered or obtained by BIGresearch from any source; the present or

future methodology employed in producing BIGresearch statistics; or the BIGresearch data and estimates represent only the opinion of BIGresearch and reliance thereon

and use thereof shall be at the user’s own risk.

BIGresearch® is a registered trademark of Prosper Business Development Corp.

This report is derived from the following BIGresearch® Studies:

• BIGresearch® Consumer Intentions & Actions® Survey (CIA™), June 2011 (N = 8379, respondents surveyed 6/1 – 6/8/11)

• BIGresearch® Consumer Intentions & Actions® Survey Trends, June 2003 – June 2011

• Consumer Confidence

• Employment Environment

• Practical Purchasing

• Effects of Escalating Pump Prices

• 90 Day Outlook: Future Purchase Plans

• Guest Contributor:

• John Mariotti, President & CEO, The Enterprise Group

© 2011, Prosper®

Consumer Confidence

Source: BIGresearch®, Consumer Intentions & Actions® Survey, JUN 10-11

Confident/Very Confident in Chances for a Strong EconomyAdults 18+

30.2%

27.3%

32.2%

27.8%

24%

25%

26%

27%

28%

29%

30%

31%

32%

33%

© 2011, Prosper®


Confident/Very Confident in Chances for a Strong EconomyAdults 18+

Consumer Confidence

30.2%

27.3%

32.2%

27.8%

24%

25%

26%

27%

28%

29%

30%

31%

32%

33%

43.6

%

46.3

%

35.9

%

43.9

%

18.8

%

30.2

%

30.2

%

27.9

%

27.8

%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Consumers Worried about Economy

• Not a pretty picture—discouraging!

• Lack confidence that government ―gets it.‖

– Debts, Deficits, Dithering…

• Jobs coming back too slowly

• Recovery faltering, uncertain

• Small business owners very concerned• Obamacare, New Regulations (EPA+), Taxes (temporary)

• No relief in sight! A “broken economy”

© 2011, Prosper®

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jun-08 Jun-09 Jun-10 May-11 Jun-11

More Same Fewer

Employment Outlook

Regarding the U.S. employment environment, over the next 6 months, do you think

that there will be more, the same or fewer layoffs than at present?Adults 18+

* U.S. Unemployment Rate for the previous month for each corresponding MMM-YY, as reported by the U.S. Bureau of Labor Statistics

Source: BIGresearch®, Consumer Intentions & Actions Survey®, JUN 08-11

9.4%*

5.4%*

9.6%*

9.1%*9.0%*

Job Situation: Complex & Worrisome

• Layoffs may not increase…(postponed hiring)

• New jobs may not either (at least not enough!)…• Need 150,000/mo. just for new entrants to labor force

• 5 people looking for every 1 job available—wrong skills too!

• Productivity gains = competitiveness—but fewer

jobs

• US manufacturing rebound good; but too few jobs

• Housing still in BIG trouble—no relief in sight• Foreclosures + Excess Home Inventory

• Tighter Financing Rules + Worried Homebuyers

• Most materials in houses made in USA—way down too

© 2011, Prosper®

Practicality in Purchasing

In the last 6 months, have you made any of the following changes?Adults 18+


37.1%

47.8%

48.5%

45.0%

55.0%55.2%

30%

35%

40%

45%

50%

55%

60%

Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11

I have become more practical and realistic in my purchases

I focus more on what I NEED rather than what I WANT

Jun-11 #s =

New June

HIGHS

Consumers worried—about their future

• Buying necessities, but inflation hurting them

• Want to spend, but are afraid

• Savings up—a very good direction

• BUT:

• Government budget cutting means cutting

government jobs

• Entitlements are ―broke‖—insolvent• Medicare, Medicaid, Social Security,

• States & State Pension Funds

© 2011, Prosper®

Effects of Escalating Pump Prices

Fluctuating Gas Prices Have Impacted My SpendingAdults 18+


Energy Information Administration (All Grades, All Formulations)

$3.91

Expected price per gallon at

the end of the month

45.7%

Anticipate gas prices will

continue to rise through the end

of June

$2.00

$2.25

$2.50

$2.75

$3.00

$3.25

$3.50

$3.75

$4.00

$4.25

60%

65%

70%

75%

80%

85%

Gas Prices Have Impacted Spending Avg. Retail Gasoline Prices (per gal.)

Avg

. R

eta

il G

as

olin

e P

ric

es

(p

er

ga

l.)

% I

mp

ac

ted

59.6%

Hybrid Automobiles are ―Hot‖

(only 8.9% are considering

purchasing in next 6 months)

Symbolic of Failed Policies

• Failed Policies (a partial list) • Excess Spending (TARP, Stimulus, QE1 & QE2, etc.)

• No budget, just spend, spend, spend—record deficits

• Reduced value of the US$ & we buy Oil with US$

• Warned by ―rating agencies‖…of credit downgrade

• US has enough oil/gas/coal reserves but is not

permitted to find, extract it & use them…• Alternatives are years/decades away:

Wind, Solar, Nuclear, Geothermal, Tidal. Environmentalists block

plans anyway!

• The USA is more dependent on foreign oil than ever

• Government Energy Policy is “Do nothing.”

© 2011, Prosper®

Category: May-11 Jun-10 Jun-09 Jun-08 Category: May-11 Jun-10 Jun-09 Jun-08

Children’s up up up up Toys/Games up up up up

Women’s Dress up up up up CDs/DVDs/Videos/Books up up up up

Women’s Casual up up up up Electronics up up up up

Men’s Dress up up up up Groceries up up up up

Men’s Casual up up up up Home Improvement up up up up

Shoes up up up up Lawn & Garden down up up up

HBC up up up up Home Furniture up up up up

Dining Out up down up up Home Décor up up up up

Sporting Goods up up up up Linens/Bedding/Draperies up up up up

90 Day Outlook: Future Purchase Plans

Retail Merchandise Categories - 90 Day Outlook(Jun-11 compared to May-11, Jun-10, Jun-09 and Jun-08)

Note: ―Up,‖ Down,‖ ―Flat‖ refers to the direction of the Diffusion Index compared to the previous month (May-11) or years (Jun-10, Jun-09, Jun-08). Diffusion Index = % Spending More -

% Spending Less.


Over the next 90 days (June, July and August), do you plan on spending more, the same

or less on the following items than you would normally spend at this time of the year? Adults 18+

© 2011, Prosper®

Category: Jun-07 Category: Jun-07

Children’s down Toys/Games down

Women’s Dress down CDs/DVDs/Videos/Books down

Women’s Casual down Electronics down

Men’s Dress down Groceries up

Men’s Casual down Home Improvement down

Shoes down Lawn & Garden down

HBC down Home Furniture down

Dining Out down Home Décor down

Sporting Goods down Linens/Bedding/Draperies down

90 Day Outlook: Future Purchase Plans

Retail Merchandise Categories - 90 Day Outlook(Jun-11 compared to PRE-RECESSION Jun-07)

Note: ―Up,‖ Down,‖ ―Flat‖ refers to the direction of the Diffusion Index compared to the prior year (Jun-07). Diffusion Index = % Spending More - % Spending Less.


Over the next 90 days (June, July and August), do you plan on spending more, the same

or less on the following items than you would normally spend at this time of the year? Adults 18+

Do increasing

food prices

explain why

consumers plan

to spend MORE?

Summary: A ―Broke‖ US Economy

• Consumers know better than government

— “live within their means” —

– Consumers still hurting from 2007

– Consumers want & need to buy, but are afraid

– Buying necessities, gas & food, modest gifts & vacations

• A recovery? Maybe, but an anemic one so far…

• Stock market has plateaued & pulled back

• Consumers fearful about their future—health care,

retirement, jobs, inflation, everything!

© 2011, Prosper®

Contact BIGresearch®

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400 W. Wilson Bridge Road

Suite 200

Worthington, OH 43085

Ph: 614-846-0146

[email protected]

Learn more about John Mariotti at: http://www.mariotti.net and read his

views weekly, at ―Telling it like it is‖: http://mariotti.blogs.com/my_weblog/

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