Bloomberg is reporting that retail sales in the U.S. rose twice as much as forecast in May as tax-rebate checks spurred Americans to shop at electronics and department stores, helping them cope with record gasoline prices.
I don't believe it, and have some data points refute today bullish retail sales figures.
Each month, BIGresearch's Consumer Intentions & Actions Survey monitors over 7,500 consumers providing unique insights & identifying opportunities in a highly fragmented and transitory marketplace. The following are some significant data points from the June survey which is not consistent with todays retails sales numbers.
- EconomyAlthough 45.3% of Americans report that they've received their economic stimulus checks, it appears that this boost to wallets is failing to raise morale regarding our economy...in June, fewer than one in five (18.8%) indicate that they are confident/very confident in chances for a strong economy, lowering from May's record low of 19.5% and less than half of June 2007's 43.9%: And adding to retailer woes: most consumers are making a beeline for just the necessities when shopping...in June, 53.8% indicate they are focused on needs over wants, rising three points from May (50.7%) and up almost 7 points from one year ago (47.0%). Economic stimulus checks were meant to jumpstart consumer spending, but it appears that consumers are stalling...of the almost half (45.3%) who've received their checks already, more than a quarter (26.9%) are saving them, 23.0% are paying down previous credit card debt, 16.3% are purchasing the necessities (i.e. groceries), 15.2% have put the checks toward gasoline expenditures, while 14.3% are paying down installment loans. Only about one in twenty are putting their checks toward vacation travel (5.9%), apparel (5.1%), or electronics (5.0%).
- Personal/FinancialWith gas prices crossing into $4 territory, an increasing number of drivers are rolling back on discretionary spending...among the now 86.0% who have been impacted by rising pump prices (a new high), the majority (54.7%) indicates that they will be curbing their cars and driving less...44.8% are reducing dining out, while - with the summer vacation season upon us - 44.1% are scaling back their travel plans: Most drivers expect no relief from surging fuel costs...almost nine in ten (87.8%) expect gas prices to continue to climb through the July 4th holiday, one in ten (10.3%) feels they'll remain stable, while a minor few (1.9%) optimistically call for a price decrease. Consumers are bracing for an average expected pump price of $4.39/gal come Independence Day, which may be right on target, given their prediction for $3.97/gal on Dad's Day.
- Future PurchasesPractical consumers, faced with rising gas and grocery prices, a crumbling housing market, increasing unemployment, forecast a continued dismal 90 day purchasing forecast, according to the BIGresearch Diffusion Index (those who say they'll spend less subtracted from those who will spend more). With most categories continuing to decline from May as well as June '07, it appears that retailers will ring up a less-than-stellar summer selling season: Six month purchase intentions for high-dollar durables aren't expected to provide retailers with revenue relief, either...compared to one year ago, fewer plan to spend on autos, computers, furniture, home appliances, housing, jewelry, major home improvements, stereo equipment, DVD/VCR, digital cameras, and vacation travel. The one anomaly continues to be TVs...9.2% intend to purchase, a slight uptick from 8.9% in June '07.