Deloitte Consumer Spending Index falls in September
New York City — The Deloitte Consumer Spending Index fell in September to its lowest level since May 2009, primarily due to a significant fall in home prices and deterioration in real wages. The Index tracks consumer cash flow as an indicator of future consumer spending.
"Low mortgage rates are doing little to spur home sales as banks limit lending and foreclosures continue to increase," said Carl Steidtmann, Deloitte’s chief economist and author of the monthly Index. "While energy prices have begun to ebb, their decline will do little to increase real wages and income growth and offset the other components of the Index. The housing market also remains at risk of further decline, and both the tax rate and unemployment are stagnant."
The Index, which comprises four components — tax burden, initial unemployment claims, real wages, and real home prices — fell to 2.39 from 2.51 the previous month.
"Consumers may start to re-evaluate what’s in their shopping baskets and put non-essentials back on the shelf until they feel more confident about the economy’s prospects," said Alison Paul, vice chairman and U.S. retail & distribution sector leader, Deloitte LLP. "It’s critical retailers understand consumers’ purchasing behaviors and attitudes and are prepared to make quick decisions about which items to mark down and where to hold the line this holiday season. Also, by capturing non-transactional data such as interactions with customers, call center logs, click streams and social media connections, retailers can better understand what drives customer engagement and buying decisions."
FRCH Design launches new website
Cincinnati — FRCH Design Worldwide has launched a newly enhanced website, FRCH.com, that provides visitors with easier access to the company’s design portfolio and more information about FRCH services, as well as greater insight into FRCH’s creative process and personality.
The new site, designed by Openfield Creative in Cincinnati, has enhanced functionality for visitors to view FRCH’s project work and create a portfolio targeted to their company’s specific needs.
“The new FRCH site was created with our visitors in mind,” said Peggy Kennedy, VP marketing for FRCH. “We wanted to create a site where current and potential clients could not only view our portfolio and see first-hand how we customize projects, but also see how we balance work and play within the company.”
Designed with convenience in mind, visitors can easily navigate the site to view the company’s wide scope of work from wherever they are, using a computer tablet or mobile device.
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Pricing pressure looms for Target as Walmart gets mojo back
Competing with Walmart is nothing new for Target, but what appears to be different this holiday season compared with the last few years is, to borrow a football metaphor, Walmart has eliminated its turnovers and is now showing some signs of momentum.
At least that’s what the retailer told financial analysts gathered in Northwest Arkansas last week for an all-day meeting.
So how concerned should Target be, considering its longstanding goal is to be within a few percentage points of Walmart’s prices. Well, Walmart has produced three consecutive months of positive same-store sales growth, and with third-quarter comps now widely expected to have increased after nine quarters of negative results, the only question in doubt is the magnitude of the increase and how aggressive the company gets with its fourth quarter guidance when it reports third quarter results on Nov. 15.
To make sure it maintains positive comp momentum, Walmart is undertaking an unprecedented marketing campaign this holiday season that has already begun with efforts around a resurrected layaway program. Click here and here to watch the latest TV spots.
According to chief merchandising officer Duncan Mac Naughton, the layaway ads are one component of an aggressive television ad campaign that will see the company double its share of voice this season. In addition to TV, the company plans seven tab advertisements, 10 free-standing inserts, a toy catalog, a holiday entertaining guide and an apparel guide that will be distributed in stores.
“We are very excited and very well prepared,” Mac Naugton said in reference to the holidays. “Our marketing plan for the holidays is quite significant.”
The longer-term challenge facing Target is keeping pace with a company for whom price is the core value proposition. Walmart has vowed to reduce its expense structure by 100 basis points over the next five years on top of a 50 basis point reduction the past two years and to plow the majority of those savings into lower prices.
“We are going to be more productive and invest in price,” Walmart U.S. president and CEO Bill Simon told analysts. “We believe the momentum will build momentum.”
As for prices, Simon said, we are not going to be beat. That’s not who we are.”