Satisfaction index a sign of optimism for holidays
Ann Arbor, Mich. The American Customer Satisfaction Index, released Tuesday, fell 0.1% — to 76 out of 100 points — compared with the previous three months.
But the score is up 1.4% from the same quarter in 2008.
“That means consumers are more willing to spend than they were a year ago, even if gains slowed since earlier this year,” said Claes Fornell, founder of the index based at the University of Michigan in Ann Arbor and a professor of business administration. “So far it’s not quite as dreadful as expected.”
The quarterly index tracks satisfaction with different industries by interviewing customers about how they liked certain products. In the third quarter, the index looked at food, apparel, beer, cigarettes, pet food, soft drinks, athletic shoes and personal-care product companies.
In the previous quarter, the index results predicted consumer spending would rise 3.25% in the third quarter. Actual third-quarter spending growth hit 3.35%, Dr. Fornell said. Government efforts, such as incentives to promote car buying, contributed to that gain.
At this point, Dr. Fornell expects fourth-quarter spending to grow between 2% and 3%, as employment and consumer confidence remain shaky.
But even that would mean retail spending would be above this time last year, when the financial crisis was fresh and scary. “The mystery is, of course, where the money’s coming from,” he said, noting consumer credit remains tight or expensive.
Save-A-Lot looks to grow in Atlanta
Save-A-Lot plans to double its store count in the next five years, with Atlanta being one of its targets for growth, the Atlantic Business Chronicle reported.
According to the report, Save-A-Lot, which operated 1,200 stores in the U.S., is focused on growing in the Southeast, with an eye on Atlanta. The company currently operates seven stores in the metro area, but the article indicates that the company feels it is not fully serving the market, and the city could support 30 stores.
Lowe’s continues to feel market pressure
Mooresville, N.C.-based Lowe’s posted third-quarter earnings of $344 million, down 29.5% from the same period a year ago.
Net sales for the quarter declined 3% to $11.4 billion. Comparable-store sales were negative 7.5% for the third quarter, in which the company opened 12 stores and closed one.
“The broad-based pressures of the macro environment are clearly evident in our sales as consumers continue to delay large purchases until they feel better about the economic outlook,” commented Robert Niblock, Lowe’s chairman and CEO. “While consumer spending remained weak, we were pleased with our sequential improvement in comparable-store sales from the second quarter and continued evidence of solid market share gains.”
In the second quarter, comps were 9.5%, a full two percentage points worse than the third quarter.
Some of the hardest hit housing markets — which Niblock identified as California, Florida and the desert Southwest — showed signs of improvement.
“As the economy and the housing market continue through the bottoming and recovery process, we know there will be ongoing macroeconomic challenges, including declining home values and rising unemployment,” Niblock added. “However, we are encouraged by the signs of stabilization in our business.”
Lowe’s reported earnings of 23 cents per share, while analysts had expected earnings of about 24 cents a share and revenue of about $11.28 billion.
In the fourth quarter, the company expects total sales to be flat, and comparable-store sales to fall in the negative 2% to negative 6% range.
The company’s report will be followed tomorrow by chief rival Home Depot’s third-quarter earnings announcement.