What are some of the big trends you're seeing in retailing right now?
The consumer has definitely stabilized, and we have achieved this idea of a new normal. So consumers are still clipping coupons. They're still trading down to private labels. On the luxury side, fashion isn't selling as well. The consumer is willing to invest in something if she can use it for a long time. But if it is just fashion, it is only going to be in style for a season or two. Everyone faced a different kind of financial crisis in 2008. At the low end, the dollar stores have done very well. So your average household has probably shopped more at the dollar stores.
To me, the most interesting change has been the big move to eating at home. We were starting to see that trend in 2007 with higher gas prices. Then, when the recession hit, that accelerated significantly. So anyone who can sell food has seen a significant uptick in traffic, starting in 2008, although the amount spent hasn't necessarily responded because of the trade-down to private-label goods, where prices are cheaper. For a while, you were seeing an increase in sales of prepared foods. But once again, as the consumer really hunkered down, you saw a significant increase in the sales of scratch baking products. So consumers were buying food processors, pots and pans -- items they didn't have because they ate out so much. Consumers are spending where they see value, though different consumers define value differently.
How else have consumers' habits changed?
The consumer isn't thinking, "Do I spend it here or there?" Now it's, "Do I spend it or save it?" A lot of retailers are worried about the consumer's appetite for credit. People don't want to leverage up again, and they want to feel that they can manage within a budget. Some retailers are saying that the consumer isn't putting that extra item in the basket. And so even if it was a low-priced item, units per transaction are down.
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