FINANCE

Deloitte: Shoppers’ belts remain tight despite improving economy

BY Katherine Boccaccio

New York — Survey results by Deloitte, released Tuesday, found that even as the economy improves, 94% of Americans indicate they will remain cautious and keep their spending for food, beverage and household goods at its current level.

According to Deloitte’s 2013 American Pantry Study, 92% indicated they have become more resourceful, and 86% say they are getting more precise in what they buy — attitudes that have remained consistent in the three years Deloitte has conducted the study, and across income levels.

Despite enduring frugal attitudes, few consumers feel they are making any compromise: More than seven in 10 (72%) said that, even though they are spending less on household and grocery items, it doesn’t feel like they are sacrificing much, a seven percentage point increase in two years.

Nearly nine in 10 (88%) reported they have found several store brands that they feel are just as good as national brands, and few consumers plan to switch back to national brands: Only 27% plan to do so as the economy rebounds, an eight percentage point decline from the previous year.

"One of the most notable year-over-year trends in the study is how embedded frugality has become due to the recession," said Pat Conroy, vice chairman, Deloitte LLP and consumer products sector leader. "Prudent consumers and improving perceptions about store brands are squeezing national brands’ position. The gap between the few ‘must have’ brands on shoppers’ lists and others on the shelf may be widening.”

The survey found that as store brands become more entrenched in the pantry, brand loyalty continues to slide; however, consumers appear to be selectively loyal to certain brands.

Shoppers are also selective about the retail channels where they are willing to purchase certain items. Consumers surveyed shop an average of 2.5 channels in each product category, compared with an average of 5.5 channels (including grocery, mass merchandise, club, drug, convenience, dollar, neighborhood market and online) for all of their food, beverage and personal goods combined.

Loyalty cards’ importance in consumers’ cross-channel shopping has increased, as the number of consumers with three or more grocery loyalty cards has grown from 28% in 2010 to 39% in the most recent survey.

Additionally, 58% of shoppers surveyed use shopper loyalty cards in grocery stores every time they shop, up 14 percentage points in two years, and 30% participate in a loyalty program via their smartphone while shopping in a store.

While 14% of shoppers surveyed currently buy consumer products online and pick them up in the store, 43% indicate they would like to do so, with strongest demand appearing in food and beverage categories for in-store pickup.

Eleven percent purchase online with home delivery, and the number rises to 34% among those who would like to do so.

"Consumer product companies can use mobile and online channels to strengthen the functional and experiential brand attributes that translate into conversion and loyalty,” said Conroy. “They should consider aligning their digital efforts with consumers’ location and context to reach shoppers online and on their phones, blending into their list-making, meal planning, product and price-checking, family activities and health and beauty routines.”

Nearly one-quarter (23%) of respondents age 45 to 70 indicated they are interested in using mobile coupons they can scan at the checkout, up from 12% in last year’s survey, compared with a six percentage point increase among respondents age 21 to 29.

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FINANCE

Target warns Q1 profit will fall short of forecast

BY Katherine Boccaccio

Minneapolis — Target Corp. said Tuesday it will miss its first-quarter profit outlook as seasonal and weather-sensitive items underperformed.

The retailer also said it now expects same-store sales to be flat in the quarter.

Target’s quarterly results are slated to be reported on May 22.

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OPERATIONS

Macy’s appeals latest ruling Martha Stewart-J.C. Penney dispute

BY Katherine Boccaccio

New York — Macy’s Inc. filed an appeal on Monday, challenging Manhattan state court judge Jeffrey Oing’s Friday ruling that J.C. Penney can sell unbranded Martha Stewart goods in its stores, at least temporarily.

Penney was celebrating the decision that would allow it to sell Martha Stewart items as long as they didn’t carry her name, especially since the products – valued by one analyst at $100 million — were already manufactured and being stored in warehouses.

In the Monday appeal, Macy’s claimed that Oing "erred in several significant respects." Previously, Oing had barred Penney from selling the disputed goods under a Martha Stewart label. His ruling on Friday denied a request by Macy’s to expand that ban to include products that would be branded "JCP Everyday.

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