A report finds that some industries are steadily fending off the recession, while new consumer values are emerging.
Though many industries in the retail sector continue to suffer, some have seen consistently high sales, according to data from the Census Bureau's Monthly Retail Trade Survey from July 2003 to 2009.
The survey shows that while sales of some industries, such as auto dealers, furniture stores, and department stores have declined over the past few years, other areas, such as computer stores, restaurants and bars, and liquor stores have seen a steady climb and remain above 2003 levels. In addition, sales at warehouse stores, such as Costco, have soared nearly 50 percent – from $17.8 million to $33.4 million – which is all a clear sign that the recession has molded a new type of consumer, some experts say.
"What's happening now is that consumers have learned to use coupons, they've learned to rearrange shopping trips," says Tim Henderson, senior director and consumer strategist for Iconoculture, a Minneapolis-based consumer research company. "All those new behaviors have taken hold, and they have a new [appreciation] of the money they're going to be bringing home."
Henderson says he expects the migration to bulk stores to continue, as consumers are becoming more "value-focused" as the economy recovers.
"You now have a consumer who is in more of a 'saving' mindset than a 'spending' mindset," he says. "They're still spending money, they're just being smarter about how they're spending it."
Herb Sorensen, author of Inside the Mind of the Shopper: The Science of Retailing and founder of the Troutdale, Oregon-based TNS Sorensen in-store research company, says the continued rise of warehouse store sales is also a result of choice. Shoppers are generally attracted to the large selections of some retailers, Sorensen says, but the number of products makes it difficult to make a purchase. In a recession, that effect can be exacerbated, which is why warehouse stores have prevailed.
"You buy two items in this category regularly, and the [regular retail] store offers you several hundred," says Sorensen. "It can be a pain in the neck."
Sorensen also says the rise in sales of computer stores, restaurants, and liquor stores – which are all hovering around the 10 percent mark – might be considered luxuries, but can partly be attributed to a phenomenon called "licensing," in which consumers feel they deserve a reward for the sacrifices made during the economic downturn.
"When a shopper has purchased some meritorious things such as fruits and vegetables, they feel licensed to buy an indulgence," he says. "Just because they are prudent in backing off on really big expenses, that doesn't mean they're not going to buy luxury. It's what I call a move to small pleasures."
Henderson adds that the computer store sales, which include electronics, also represent another shift in values: staying at home with family to watch movies and play video games, instead of splurging on entertainment outside of the home, such as sports events.
"They're having those family days as opposed to going to a baseball game," he says. "How much are you going to spend on tickets, food and travel, as opposed to staying home and watching a movie?"
Henderson says there will be another shift in the retail industry soon, and has been advising his clients to create new marketing strategies as consumers feel more confident about spending.
"I predict consumers are going to be shifting their money again," he says. "But we're not going to get a clear picture until 2010, because we've already entered the holiday season."
J.J. MCCORVEY is a reporter at Inc. magazine, where he covers a wide range of topics, including technology and business research. He has covered metro news for The Detroit News, and his work has been featured in Men's Fitness. @jmccorvey