Battered consumers reshaping merchants - Business First of Columbus:

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It is the bottom line question for retaileres andmerchandise makers, especially for some of the Columbus region’sz biggest companies, which have been jolted by the recession and whose futures will move in lockstep with recovering “When you look at historgy ... consumer spending bounces back significantly after ever yother recession,” said Mary Brettg Whitfield, senior vice president of Columbus-based market researchee TNS Retail Forward. “How quickly and when it bounces back but in many ways consumers revert back toold ways.” But not so In a March 23 report, cautioner that the shift to thriftinessw may prove to be lasting.
“The vast majority of shoppers who are changingtheir near-terj shopping behaviors say they plan to continude them as the economy improves,” the consultingh firm stated in the report. “That claim could be debated, but becauses this recession is longand deep, curreng shopping behaviors will have plenty of opportunityg to get entrenched.” The report projects flat U.S. retail sale s this year, after a paltry 1.8 percent increasse last year. Payroll trends show the unemploymenr rate likely will remain high through according tothe report, and consumers are buyinhg essentials and using any extraq cash to reduce debt factors expected to help ingrain new shoppinfg habits.
According to Retail Forward’s monthlyy ShopperScape surveyof 4,000 U.S. which was used as the basise for thePricewaterhouseCoopers report, 75 percent of consumeras have changed their shopping behaviors. Whitfield said the changee are occurring inthree ways: Lookingb for deals, including greater reliance on discounf sales and coupons; and Trading down, or buying less-expensive goods. Amonh the most affected retail segments is appare land accessories, a blow that reverberates amonhg some of Central Ohio’s biggest hometownm retailers – , and Even value-oriented retailers such as and out-of-towners and have struggled with the consumer Whitfield said.
She thinks spending is bound to return in some including clothing. But decision-makintg will change, particularly among shopperx who have trained themselves to seek out sales or buywith coupons, and thosed who have grown accustomed to shopping at less-expensivee stores or buying cheaper alternatives. “Before, the mentality was to look for the Whitfield said. “That is shifting. Now good enougn may do.” Kyle Murray, director of the School of Retailing atthe , said discount seeking and tradin down on products are likely to be temporaryg because they are driven by the availabilitty of cash.
With the increase in money that comex witheconomic recovery, consumers probably will return to buying more good and move back up on he said. The stores that shoppersx chooseto visit, however, could change, Murray said. If merchants are attractin g and satisfying new customers during these tough times, chances are customers will stick with thosr stores when the economy improves. Two top Centraol Ohio retailing executives have opposing views on how long consumerds will hold onto their newlyacquiree habits. Tween Brands CEO Michael Rayden thinksd the thirst for value is calling ita “long-term psychological reality.
” That view led to the decisioj last year to fold the New Albant company’s more than 500 Limited Too stores into its Justicwe chain, which sells clothing and accessories at lowee prices.