Retail Forward noted, "The modest pickup in retail spending is persisting despite challenges ranging from income constraints to bad weather. The recovery should continue on an uneven path as shoppers slowly resume spending that was postponed or reduced during the recession as a precaution."

The results were led by stronger-than-average results at Apparel and Accessory Stores followed by Department Stores.  Lagging were Food, Drug and Mass retailers. (For a list of the retailers reporting and their results, please follow this link: http://www.retailforward.com/retailintel/samestr_sales.pdf.)

January's results occurred despite household finances that remain constrained by incomes but that also show improvement by other measures of financial health, according to the January ShopperScape™ survey by Retail Forward (Figure 1):

• 32% of households feel worse off in terms of their household income levels compared with a year ago, a slightly higher percentage than December and significantly higher than a year ago.
• Despite income constraints, households are feeling slightly more secure about their jobs.  Job security edged higher from December and from a year ago, particularly in terms of the percentage of households that feel better about their job security compared with a year ago. 
• Household perception of financial health is especially improved from December and from a year ago in terms of investments and home values and, to a lesser extent, in terms of credit card and mortgage debt.

Figure 1.  Shoppers' Perceived Household Financial Health

Compared with Last Year

Source: Retail Forward ShopperScape™, January 2009, December 2009 and January 2010


February is unlikely to get much of a boost from Valentine's Day, according to ShopperScape™ results (Figure 2).

• A larger percentage of men (31%) and women (41%) have no plans to purchase gifts for Valentine's Day compared with a year ago.
• The only meagre sign of improvement is that 6% of women plan to spend more on Valentine's Day--a 2 percentage point increase from last year.
• Only 41% of women and 51% of men plan to spend the same or more on Valentine's Day gifts than last year, which remains sharply lower than two years ago when 48% of women and 58% of men planned to spend the same or more.

Figure 2.  Compared to Last Year, Do You Plan to Spend More, the Same, or
Less This Year on Gifts for Valentine's Day?


Source:  Retail Forward ShopperScape™, January 2008, 2009, 2010

The spending outlook is better for the next six months, however, as shoppers plan to resume spending that was postponed or reduced during the recession across a number of categories--especially homegoods and softgoods categories (Figure 3).

• Home furnishings and furniture are among the categories where spending was most reduced or postponed during the recession. And they are the categories where shoppers are most likely to resume spending in the next six months.  
• Various clothing categories--casual clothing, dress/business casual and casual shoes--also rank high among categories where reduced or postponed spending is most likely to resume in the next six months. 

Figure 3.  Postponed Purchases and Plans to Resume Spending in the Next Six Months

Retail Forward ShopperScape™, January 2010