Retail same-store sales cooled to 3.9 percent growth in October as seven months of weaker spending intentions among shoppers appeared to take a toll, according to Kantar Retail.



The sales-weighted composite for the 24 retailers reporting-most of them apparel and department store retailers-was weaker than the 5.7 percent same-store sales gain last month but stronger than the 1.7 percent gain in October of 2010. Note that the calculations no longer include Walmart, which stopped reporting monthly results in April 2009.

 

“Weather, pricing, and promotions all had some impact on October’s same-store sales results. The biggest drag on growth, however, has to be the belated impact of shoppers’ intention to curb their spending in the coming months and into the holiday,” said Frank Badillo, Senior Economist.

The results were led by stronger-than-average results at Food, Drug, and Mass retailers, which have been bolstered in part by elevated fuel and food prices. Department Stores and Apparel and Accessory Stores lagged.


 

The October letup in same-store sales growth may have reflected a lagging response to shopper spending intentions that had weakened for the prior seven months in a row. In October, those spending intentions as tracked by Kantar Retail’s ShopperScape survey improved, suggesting that retail sales growth may avoid a more significant falloff going forward. The October data, however, is preliminary unweighted data and subject to revision.


  • The percentage of shoppers planning to spend less in the coming month edged lower by nearly a fully percent point to about 38% (as measured by a three-month moving average). 
  • The shift away from spending less primarily resulted in more shoppers planning to spend about the same in the coming month. This improved to slightly more than 51% of all shoppers. 
  • The percentage of shoppers planning to spend more in the coming month edged slightly higher in September.

The October reversal in spending intentions may not last into the holidays, however. Shoppers’ holiday spending plans deteriorated slightly in October from the prior two months.



  • The percentage of shoppers planning to spend less on holiday gifts increased by 4 percentage points in October to 39 percent.
  • The percentage of shoppers planning to spend about the same as last year edged lower to 45 percent. 
  • The percentage of shoppers planning to spend more this holiday held steady.

Shoppers may be hard pressed to sustain their spending intentions based on perceptions of their financial health.


 


  • Home values and investments remain the most significant drag on financial health. 
  • Slight improvements in October in terms of perceptions of job security, income level and mortgage/car payments are all statistically insignificant.
  • The changes are mixed in terms of shoppers’ perception of their credit card debt levels.

The ShopperScape survey is conducted each month with a sample of 4,000 U.S. primary household shoppers. The survey is conducted online among a nationally representative sample of households. This month's survey was conducted the last week of September 2011. Results from the survey are available to Kantar Retail Shopper Insights subscribers.