BUDGETING BLUES
Highlights from BIG Research's July Economic & Consumer Insights report.
| 41.7% of consumers say they've become more practical and realistic in purchasing, up four points over the same period last year. | 35.2% say there will be more layoffs in the next six months while 53.7% predict the same as today. |
| 26.9% plan to increase savings in the next three months and 35.9% want to pay down debt. | 78.2% of 18-34-year olds cite rising gas prices as crunching their budgets vs. 70.6% of those 55 or older. |
| WOMEN'S CLOTHING SHOPPING, BY INCOME | MEN'S CLOTHING SHOPPING | |||
|---|---|---|---|---|
| Less than $25,000 per year | $25,000-$49,999 per year | $50,000-$99,999 per year | More than $100,000 per year | |
| 1. Wal-Mart 33.5% 2. JCPenney 4.6% 3. Kohl's 4.3% | 1. Wal-Mart 24.0% 2. JCPenney 7.4% 3. Kohl's 7.2% | 1. Wal-Mart 14.0% 2. Kohl's 14.0% 3. JCPenney 7.9% | 1. Kohl's 13.8% 2. JCPenney 7.1% 3. Macy's 6.3% | 1. Wal-Mart 18.9% 2. JCPenney 7.7% 3. Kohl's 6.0% 4. Sears 3.7% 5. Target 3.3% |
Source: Big Research
TROUBLE BREWING FOR WAL-MART?
According to Merrill Lynch research, many of Wal-Mart's growth metrics are slowing, including new store productivity, which is lagging behind Target. One reason for the slowdown is that more of Wal-Mart's new store openings have been greenfield stores, rather than expansions of its existing stores. The greenfield stores may be cannibalizing existing store sales to a greater degree than Wal-Mart may have expected.
| 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006E | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Wal-Mart | Sales per SF | $332 | $354 | $375 | $387 | $406 | $422 | $429 | $435 | $436 | $434 |
| Productivity | 85.20% | 67.10% | 73.10% | 78.20% | 95.60% | 81.30% | 79.30% | 84.10% | 75.00% | 70.50% | |
| Comps | 6.10% | 9.00% | 7.70% | 6.00% | 6.10% | 5.00% | 4.10% | 3.30% | 3.40% | 2.40% | |
| Target | Sales per SF | $245 | $251 | $264 | $271 | $272 | $276 | $281 | $286 | $298 | $312 |
| Productivity | 82.30% | 83.20% | 72.70% | 91.30% | 66.10% | 92.50% | 87.40% | 77.40% | 82.70% | 108.60% | |
| Comps | 6.00% | 6.10% | 6.70% | 3.40% | 4.10% | 2.20% | 4.40% | 5.30% | 5.60% | 5.00% |
| 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006E | |
|---|---|---|---|---|---|---|---|
| New Stores | 213 | 228 | 246 | 278 | 301 | 316 | 318 |
| Greenfield openings | 98 | 105 | 115 | 115 | 128 | 128 | 140 |
| % of total | 46% | 46% | 47% | 41% | 43% | 41% | 44% |
| Greenfield Supercenters | 58 | 65 | 65 | 65 | 85 | 85 | 115 |
| % of total | 27% | 29% | 26% | 23% | 28% | 27% | 36% |
Sources: Merrill Lynch estimates, company information
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