Consumers foresee a positive start to 2007…the majority (50.5%) are confident/very confident in chances for a strong economy in the next six months, up from 46.9% last month and three points from last year (47.2%).

Now that Saddam’s sentence has been carried out, fewer consumers contend they worry about political and national security issues…this month, 17.2% continue to be concerned, down from 18.9% in December, though up slightly from last year (16.4%). Stay tuned next month to see how Bush’s recent commitment of 20K+ more soldiers in Iraq affects sentiment…

Perhaps it’s all those gift cards burning a hole in consumers’ pockets that has them feeling like they’ve money to spend…39.6% say they’ve become more practical and realistic in their purchases, down more than a point from December (40.8%) and a full five points from a year ago.

Or, perhaps consumers have made the resolution to take care of themselves in the New Year…fewer than half (48.5%) say they focus more on needs over wants in purchases, which is also down from last month (50.2%) and January ’06 (51.8%).

The increase in confidence translates to an improved employment outlook…fewer than one in three (28.6%) expect more layoffs in the next six months, down from 34.6% last month. 60.7% expect layoffs to remain the same, down from 54.5%, while 10.7% predict fewer, relatively flat from last month (10.9%). Personal concerns with becoming laid off down slightly from 4.5% in December to 4.2%.

With those holiday bills now rolling in, consumers continue to make paying down debt their financial priority…38.3% intend to make a dent in their debt in the next three months, up from 36.7% in December, but a decrease compared to last year (42.3%). With post-holiday bargains abound, those planning to decrease overall spending on par with December (32.6%) and lower than a year ago (34.0%). Those planning to increase savings rises a point from December to 30.3%, but lowers almost as much from a year ago (31.1%). And it looks like credit cards may be getting more of a workout compared to last January…22.0% intend to pay with cash more, a decline of almost four points (25.7%).

With the rise of consumer confidence comes renewed faith in Wall Street…68.6% of investors would definitely/probably invest, up from 65.0% last month. Slightly fewer investors intend to buy stocks in Q1 (12.1%) compared to December, while those planning to sell also down slightly (5.9%).

With the current national average for gas prices down from last year (according to AAA) and consumer confidence up from December, fewer drivers are feeling the pinch at the pump. This month, one-third (33.1%) say that gas prices are having no major impact on their spending, up from 29.4% from last month and from 31.4% last year. Drivers are predicting an average pump price of $2.58 on Valentine’s Day, which is slightly more positive than the $2.67 they expected at New Year’s.

But how are pump prices affecting the type of vehicle consumers are considering when shopping for a new auto? In May ’06 – when the national average for gas was close to $3/gal. – only 18.6% of those planning to buy a vehicle were considering an SUV. This month – as gas prices approach $2/gal. – about a third (33.1%) of those in the market for a vehicle are considering an SUV. The message for auto dealers? Now would be a good time to promote some of those gas-guzzlers right off your lot.

Wal-Mart’s apparel share slide continues into ’07…this month in Women’s Clothing, the discount giant leads with 12.0% who shop there most often, but a sharp decline from the 18.5% who shopped there most often one year ago. Kohl’s is second with 7.1% (up from 5.7% in January ’06)…the rest of the Top 5 (January ’06 shares in parenthesis): JC Penney 6.2% (5.7%), Macy’s 5.5% (2.1%), and Target 2.5% (2.6%).

But, of course, those who subscribe to BIGresearch’s Retail Ratings Report saw this coming. The report, available for ten major merchandise categories, shows that Wal-Mart’s losing much of its share of female Women’s Clothing shoppers to newly-national Macy’s and ever-expanding Kohl’s. Click here for sample insights from December: www.bigresearch.com/cast-members/big-rrr-womens-dec06.pdf.

It’s the same story in Men’s Clothing…Wal-Mart’s lead here had whittled down from a strong 21.8% in January ’06 to 14.4% this month, while top competitors JC Penney (8.3%), Kohl’s (7.1%), and Macy’s (4.7%) had market share gains from a year ago. Sears (3.3%) rounds out the Top 5.

Wal-Mart is out of step in the Shoe department as well….the big W led Payless one year ago with 15.7% to 15.0% share, but begins ’07 at #2 with 10.6%. Payless leads with 12.5%, while Kohl’s (3.5%), JC Penney (3.0%), and DSW (2.5%) round out the Top 5.

Where will consumers look to “accessorize” the iPods, game stations, and flat screen TVs that Santa brought them last month? A good bet is Best Buy…the big box leads the Electronics category with 29.7% who shop there most often (up from 26.6% in January ’06). Wal-Mart follows with 15.8% (down from 21.4% a year ago)…Circuit City (8.2%), Sears (2.8%), and Target (2.2%) complete the Top 5.

Also on the Electronics front…one-quarter of consumers (24.5%) are planning to buy a new cell phone or switch providers in '07. With the average monthly bill among these consumers at more than $73, this is potentially big business for providers who are able to convert these consumers into customers. So which providers are top on the consideration list? Verizon (37.0% say so), followed by Cingular (29.5%), Sprint (21.6%), T Mobile (20.3%), and Alltel (9.6%). Caller ID (with 73.9%) tops the list of features these consumers look for in a new phone, while voicemail (61.4%), a color screen (58.7%), speaker phone (55.9%), and a built-in camera (54.8%) complete the Top 5.

Although consumers prefer traditional grocers (53.7%) over discount stores (18.7%) when shopping for Groceries, Wal-Mart still takes the cake in this category…with 15.8% share, the discount behemoth continues to lead Kroger (5.9%), Safeway (3.4%), Publix (2.8%), and Meijer (2.3%).

Health & Beauty Care is also Wal-Mart’s bread and butter…with one in three (31.2%) shopping there most often, the discounter maintains a large lead over Target (6.6%), CVS (6.5%), Walgreens (5.8%), and Rite Aid (1.9%).

With location (61.9%) as the top reason to shop a particular store for Prescription Drugs, it appears that consumers prefer to fill their meds at their corner drugstore…druggists Walgreens (15.5%) and CVS (12.8%) continue to lead this category, followed by Wal-Mart (7.7%), Rite Aid (4.1%), and Eckerd (2.0%). Other top reasons to shop include insurance coverage (41.2%) and the ability to phone-in prescriptions (35.8%).

So with the trouble Wal-Mart’s having with softlines, are Prescription Drugs a bright spot for the discounter? According to this month’s Consumer Migration Index (CMI) for Prescription Drugs, which tracks those who have immigrated to a store (new customers within the past year) against those who have emigrated (left within the past year) and where a positive rating spells net growth to a retailer, Wal-Mart scores a positive +7.0 rating, higher than competitors Walgreens (+3.8) and CVS (+4.0)...so perhaps the big discounter's recent move to cut prices on generics boosted the number of prescriptions they filled. Other traditional druggists, such as Rite Aid, didn’t fare as well.

Inconvenient location (22.2%) topped the list of reasons to have prescriptions filled elsewhere, followed by (ahem...see note on Wal-Mart above) high prices (16.5%) and poor customer service (13.6%).

With the holiday shopping frenzy behind us, 90 Day Outlook dims from last month...according to the BIGresearch Diffusion Index (those who say they’ll spend less subtracted from those who’ll spend more), while categories declined from December, the good news for retailers is that consumers may be more willing to spend compared to last January, as all major categories improved year-over-year:

Perhaps all the good little boys and girls didn’t get that big-ticket item for Christmas that they were hoping for…while purchase intentions for most high-dollar durables declined from December, they improved from January ’06 for autos, computers, furniture, home appliances, jewelry/watch, major home improvements, stereos, TVs, digital cameras, and vacation travel…housing down slightly, DVD/VCR flat.