Consumer Reports Index: Worried Consumers May Make Reluctant Shoppers During Final Weeks of December

/PRNewswire/ -- While retail spending was strong this November, consumers are feeling the pain of a weak employment picture and increased financial troubles. Americans are showing signs of waning confidence, increased stress and reluctance to spend more in December than a year ago, according to the Consumer Reports Index December report.

The Consumer Reports Retail Index showed that the Past 30-Day Retail Index for December, reflective of November activity, was 12.4, up from both the prior month (10.9) and one year ago (11.2). But with just two weeks left to go in the holiday shopping season, the Consumer Reports Index offers some troubling signs for retailers. The Next 30-Day Retail Index for December (reflecting planned December activity) is down slightly (11.8) versus a year ago (12.2). This was led by the soft performance of planned purchasing of personal electronics relative to last year (27.8% versus 32.9%, respectively).

"Despite all the talk and media attention about positive economic growth, consumers are telling us that they are not seeing or, more importantly, not feeling the difference," said Ed Farrell, a director of the Consumer Reports National Research Center. "The consumer may not be confident enough to continue spending through the holiday season. It may require deep discounting from retailers to get consumers back to the store in the final weeks of December."

After five straight months of improvement, the Consumer Reports Trouble Tracker Index points to an increase in consumer financial difficulties (e.g. missed major bills, job loss, loss of health-care coverage) and is up this month to 52.7 from 49.3 the prior month, but well below one year ago (62.0).

The Consumer Reports Employment Index is down in December to 49.2 from 50.3 in November, and is on par with one year ago (48.9), bringing to a halt three months of modest gains. December's Employment Index is indicative of an economy shedding more jobs than it is creating. In the past 30 days, the proportion of Americans that have lost their job has increased to 7.4% from 4.9% a month earlier. Past 30-day job losses are at their highest level since June (8.6%).

The Consumer Reports Index report, available at www.ConsumerReports.org , comprises five key indices: the Sentiment Index, the Trouble Tracker Index, the Stress Index, the Retail Index, and the Employment Index. Here are the key findings:

Consumer Reports Sentiment Index : 45.1*

The Consumer Reports Sentiment Index (45.1) has slipped slightly from the prior month (46.6), but is up slightly from one year ago (41.8). Sentiment has doggedly refused to enter positive territory (over 50) since it was first measured by the Consumer Reports Index on October 5, 2008 and stood at 45.3.

* The most optimistic consumers: Age 18-34 – 53.5, (down from 58.4 the prior month) and those with household incomes $100,000 or more – 54.5, even with prior month (55.1).
* The most pessimistic consumers: Households with income less than $50,000 (40.2, down slightly from the prior month at 42.2), and consumers age 65 and older (38.7, little changed from a month earlier at 38.4).


* The Consumer Reports Sentiment Index captures respondents' attitudes regarding their financial situation, asking them if they are feeling better or worse off than a year ago. When the index is greater than 50, more consumers are feeling positive about their situation. When it is below 50, more consumers are feeling worse. The Sentiment Index can vary from a high of 100 to a low of 0.

Consumer Reports Retail Index : Past 30-Day 12.4, Next 30-Day – 11.8*

* The Past 30-Day Retail Index for December (reflective of November activity) is 12.4, up from the prior month (10.9), as well as a year ago (11.2). December's Next 30-Day Retail Index (planned purchases for December), is at 11.8, up substantially from last month (8.0), but is slightly trailing last year at this time (12.2).
* Looking in detail at the categories comprising the Past 30-Day Retail Index* gains were attributable to an uptick in small appliance sales versus the prior month (21.8% versus 16.7%, respectively); gains in home electronics, up to 15.0% from 11.8% a month earlier; and personal electronics (26.2), up substantially from the prior month (19.6). Versus one year ago, sales in the past 30-days were up for home electronics (15.0%) versus 11.9% last year; and for major appliances (8.1%), up from 6.8% a year ago.
* The gain in the Next 30-Day Retail Index* for December, reflective of December activity, was attributable to an increase in planned purchasing of personal electronics (27.8%), up from 18.2% a month earlier; and a gain in planned purchasing for home electronics (16.5%) versus the prior month (10.0%). Compared to last year, however, planned purchasing of personal electronics was down for this December, 27.8% versus 32.9%, respectively.


* The Consumer Reports Retail Index looks at consumer purchases in the past 30 days as well as the outlook for planned purchases in the next 30 days across several categories. The Consumer Reports Retail Index represents the proportion of respondents that made a purchase in the following categories: major home appliances, small home appliances, major home electronics, personal electronics, and major yard and garden equipment. The Retail Index is a weighted calculation. For example, a major appliance is of greater value than a small appliance. Because of their size and frequency, car and home purchases are tracked separately.

Consumer Reports Trouble Tracker Index : 52.7

* Consumers faced more troubles than last month, signaling a halt to five months of improvement. The trouble tracker index increased to 52.7 in December, up from November's 49.3, though the Trouble Tracker Index is much improved from one year ago (62.0).
* Negative developments were led by an increase in consumers that lost their job in the past 30 days to 7.4% from 4.9% in November, and an increase in those that have missed a payment on a major bill (not mortgage) to 9.5% from 8.9% a month earlier.
* A sign of the weak jobs market is the proportion of consumers that have lost or face reduced health-care coverage (9.0%), up slightly from last month (8.7%), but up from a year ago (7.9%).
* On the positive side, there were fewer consumers that could not afford medical bills or medications (13.3%) versus last month (14.5%) and one year ago (15.7%). However, the improvement in the proportion that could not afford medical bills or medication may signal a change in behavior, where consumers are availing themselves of medical services less often.
* Overall, the most prevalent consumer troubles include: the inability to afford medical bills or medications (13.3%) missed payment on a major bill – not a mortgage (9.5%), and lost or reduced health-care coverage (9.0%).


* The Consumer Reports Trouble Tracker focuses on both the proportion of consumers that have faced difficulties as well as the number of negative events they have encountered. The negative events include: the inability to pay medical bills or afford medication, missed mortgage payments, home foreclosure, interest-rate increase, penalty fees, reduced lines of credit or other changes in credit-card terms, job loss or layoffs, reduced health-care coverage, or the denial of personal loans. The Consumer Reports Trouble Tracker Index is then calculated as the proportion of consumers that have experienced at least one of the negative events comprising the index multiplied by the average number of events encountered.

Consumer Reports Stress Index : 60.8*

* The level of stress consumers feel they are under is down to 60.8 from 58.5 the prior month, but is below the level from one year ago (63.0).


* The Consumer Reports Stress Index captures attitudes regarding the amount of stress consumers feel compared to a year ago. It asks whether they are feeling more stressed or less stressed. When the Stress Index is more than 50, consumers are feeling more stress and when it is below 50 they are feeling less stress compared to a year ago. The index can vary from 100 (Total Stress) to a low of 0 (No Stress).

Consumer Reports Employment Index : 49.2*

Regionally, the Northeast is doing slightly better this month, led by declining consumer stress and improved retail activity. The North, Central and South have declined slightly as a result of increased consumer economic difficulties and a decline in Consumer Sentiment.

* The Consumer Reports Employment Index examines the change in employment of those that reported starting a new job versus those that have lost their job or were laid off in the past 30 days. An index below 50 indicates more jobs were lost than gained, while a score more than 50 indicates more jobs were gained than lost in the past 30 days.

For more information regarding the Consumer Reports Index, visit www.ConsumerReports.org .

The Consumer Reports Index, conducted by the Consumer Reports National Research Center, is a monthly telephone and cell phone poll of a nationally representative probability sample of American adults. A total of 1,263 interviews were completed (1,013 telephone and 250 cell phone) among adults aged 18+. Interviewing took place between December 2 and December 5, 2010. The margin of error is +/- 2.8 points at a 95% confidence level. The complete index report, methodology, and tabular information are available.

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LocalPrice Introduces the First Website to Compare Prices of Local Services

(BUSINESS WIRE)--LocalPrice, the only website to allow users to compare prices for everyday services, announces coverage of more than 20 categories of Atlanta area service providers.

COMPARISON SHOPPING FOR LOCAL SERVICES

Shopping online has become second nature to many consumers. The online shopping experience is enhanced by the wealth of pricing and product information available through Internet retailers and shopping comparison sites. But this experience is largely limited to shopping for products.

Online shoppers searching for services like movers, locksmiths, and dentists face more difficulty getting quotes and comparing providers. Such services are usually provided by smaller, local businesses that generally don’t publish their prices. Gathering a few quotes often requires substantial time on the phone or meeting with providers.

LocalPrice is the first company to apply online comparison shopping to local services. Though they account for more than $1 trillion of US consumer spending, no other site offers price comparisons for the services LocalPrice covers.

LocalPrice's founder, Rob Shields, created the company after realizing how little pricing information was available online. "If you want to find the best price for a product online, it's only a few clicks away. Our goal is to bring that same level of convenience to shoppers searching for services in their area."

“This is an interesting approach – one that we frankly haven’t seen before,” said Gordon Borrell, CEO of Borrell Associates, a research firm that studies local advertising. “Service-oriented businesses are looking to advertise on sites that aggregate potential customers. Any site that can corral wallet-ready consumers is going to find itself in a very good position.”

OBJECTIVE, UNBIASED COMPARISONS

Many sites allow users to compare service providers based on consumer reviews. But unlike Yelp, YellowPages.com, and other sites offering subjective comparisons, LocalPrice compares providers based on a wide range of objective criteria tailored to each service category.

“Someone considering LASIK surgery can easily find online reviews,” said Shields. “But only LocalPrice provides comparisons of surgeons based on price, number of procedures performed, method used and the details of the warranty. This is important stuff to know before you pay a surgeon $4,000 to shoot a laser into your eyes.”

LocalPrice compares: movers, locksmiths, dentists, LASIK surgeons, limo companies, pet sitters, hardwood flooring installers, granite countertop installers, carpet cleaning, pressure washing, home security, pest/termite control and junk removal.

BUSINESSES RESPONDING POSITIVELY

LocalPrice offers businesses free listings to ensure that consumers receive the most comprehensive comparisons. Soft launched in 2008, LocalPrice has tested business response to its site. This has been largely positive. In fact, many businesses decide to list their rates on LocalPrice, even though they don’t list them on their website.

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