A Dip in U.S. Consumer Spending for June – Apple and Costco Bright Spots

by Paul Carton | July 2, 2010 1:53 pm

ChangeWave’s June consumer survey has picked up a dip in U.S. consumer spending heading into the summer – the most significant pullback of the past eleven months.

The survey of 2,717 U.S. consumers also picked up a downturn in consumer sentiment and expectations.

However, overall consumer spending is still stronger than at almost any other time of the past three years – and at this point the spending dip still looks more like normal seasonal bumpiness rather than the start of a new prolonged slowdown.

Spending Going Forward. Nearly two-in-five U.S. consumers (38%) say they’ll spend more over the next 90 days – but that’s 2-pts worse than our previous survey in May. While 26% say they’ll spend less – that’s also 2-pts worse than previously.

As the above chart shows, this is the most significant consumer pullback in eleven months, and it comes after the flattening out we picked up in our previous survey in the first half of May. But despite the net 4-pt decline of the current survey, the results are still among the best overall readings in a ChangeWave survey of the past three years.

Retailer Trends

The spending picture among most of the major retailers remains flat or has even declined slightly compared to last month, with the notable exception of Costco (COST[1]; +2) which experienced a 2-pt uptick in overall spending going forward.

Wal-Mart (WMT[2]) is down a net 1-pt since May, but the percentage who say they’re spending More at Wal-Mart remains the same and it continues to outperform in terms of overall growth going forward.

However, three companies who are being particularly hurt by the June weakness are Sears (SHLD[3]; -3) Macy’s (M[4]; -2) and Bed, Bath & Beyond (BBBY[5]; -2).

Apple (AAPL[6]; 15%; up 2 points) is the retailer with the most momentum on the home entertainment front. Recent ChangeWave surveys have shown very strong demand for Apple’s new iPad tablet – and adding to this momentum is the release of Apple’s new iPhone 4.

A total of 15% of respondents now say they’ll shop at Apple stores for home entertainment and computer networking products over the next 90 days – up 2-pts since May and equaling the February 2010 high (reached immediately after the original iPad release announcement).

Amazon (AMZN[7]; 30%) is up 1-pt in the home entertainment market this month while Best Buy (BBY[8]; 38%) – after falling 2-pts in our May survey – remains unchanged going forward.

Consumer Sentiment and Expectations

We also asked consumers about their impressions of the economy and found consumer sentiment and expectations have taken a turn for the worse.

In a dramatic reversal from the previous three surveys, 42% of respondents now think the overall direction of the U.S. economy is going to worsen over the next 90 days – a startling 20-pt increase in just one month. Only 21% believe it will improve – a 17-pt decline.

Source URL: https://investorplace.com/2010/07/a-dip-in-u-s-consumer-spending-for-june-%e2%80%93-apple-and-costco-bright-spots/

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