American Express study: Consumers opting for less frequent, but larger transactions in retail
New York City — Consumers are spending more, but doing so in fewer transactions, according to American Express Business Insights’ most recent Business Insights Spend Sights report.
The study, which examines spending patterns across several key categories, U.S. cities and demographic groups, finds that while economic uncertainty continues to dampen overall consumer confidence, a new pattern of less frequent but measurable splurging has become evident among a range of customer groups in several categories.
“Spending patterns since the recession indicate that value is top of mind for consumers, even among the most affluent customers," said Ed Jay, SVP at American Express Business Insights. "That said, the occasional ‘splurge’ pattern also shows that while consumers try to practice restraint, the prolonged economic uncertainty still cannot impede them from making a special purchase or two from the luxury brands that they love."
Key retail findings of the report include:
Consumers exercised restraint in luxury apparel and accessories spending, with 50.5% of average consumers and 40.6% of ultra-affluent consumers posting less than three transactions on luxury fashion in the second quarter;
In keeping with the new pattern of occasional splurges, however, consumers spent a surprising 10.1% per transaction for luxury apparel and accessories in Q2, while making 6.2% fewer purchases;
By region, Los Angeles’ mature affluent consumers proved to be fashion plates, increasing spend by 25% in the second quarter on apparel and accessories. By contrast, their New York City counterparts increased spend by just 1% in this category, indicating a significant regional shift in fashion consumption.
Shifting consumer spending patterns in the restaurant sector support a prolonged and growing trend toward value dining, with the value category posting the only gain in spend, at 3.5%, in the second quarter. Fine dining spend decreased slightly, by 0.6%, and casual establishments continued to see a decline, with a 3.2% decrease.
Talbots posts bigger-than-expected loss; chief creative officer out
Hingham, Mass. — Talbots posted a bigger-than-expected second-quarter loss on Wednesday, largely due to increased markdowns. The retailer also said that chief creative officer Michael Smaldone has departed the company, effective immediately.
Talbots reported a net loss of $37.3 million for the period ended July 30, compared with a profit of $941,000 a year earlier. Revenue fell 10% to $271.1 million from $300.7 million. Same-stores sales fell 10.4%.
Talbots said its sales and traffic so far in the third quarter are down and anticipates its high levels of promotions and markdowns will continue.
The company’s decision to part ways with Smaldone was prompted by ongoing frustration with lackluster consumer reception to Talbots’ merchandise. The retailer said it is looking for a replacement for Smaldone, and that president and CEO Trudy Sullivan is assuming the chief creative duties until the search is done.
In August, Talbots announced that it had adopted a poison-pill plan. The news came shortly after private equity group Sycamore Partners LP revealed a 9.9% stake in the company and hinted at a potential buyout.
Zale names CIO
Dallas — Zale Corporation announced that Brad Furry has been named SVP, CIO. Prior to joining Zale, he spent 21 years at The Neiman Marcus Group, most recently as VP enterprise services.
Furry will have responsibility for all information technology strategy and operations functions throughout the company.