Do rising pump prices have consumers feeling drained about the state of the economy? In March, 46.9% report that they are very confident/confident in chances for a strong economy, down more than six points from last month (53.2%). The good news here? Although current pump prices are higher than they were a year ago, consumers continue to be more confident than in ’06 (44.6%).

Although the debate continues in D.C. regarding the tenure of U.S. troops in Iraq, fewer consumers on the home front contend they worry about political and national security issues…this month, 16.6% remain concerned, down from February (18.3%) as well as last year (19.2%).

While confidence has declined, practicality has remained steady…38.5% say they’ve become more practical and realistic in their purchases over the last six months, flat with last month (38.7%) and a four-point decrease from last year (42.8%).

Further evidence that lowered confidence isn’t a harbinger of a pullback in spending (for this month, at least)…fewer than half (47.8%) say they’re focused on needs over wants in spending, on par with last month and a slight decline from ’06 (49.6%).

The employment outlook in March dims as consumer confidence falters…this month, more than a third (36.2%) predict “more” layoffs over the next six months, a rise from 29.8% in February. While more than half (54.1%) feel layoff levels will stay the “same,” this is a decline from 58.8% in February. Fewer than one in ten (9.7%) optimistically forecast “fewer” layoffs, lowering from 11.4% last month. However, consumers don’t appear to be concerned with their own employment status…only 4.3% fear becoming laid off, flat from last month.

With consumer debt reaching record high levels, you’d think these spenders would finally start focusing on debt repayment and increasing their savings, right? WRONG. With fewer than a third (32.7%) agreeing that they feel they are saving enough to meet their future needs, consumers continue to strike a perilous balance between living on credit and, well, living…in March, only 34.1% are focused on paying down debt in the next three months, down from 40.4% last month and 40.0% in ’06. Similarly, those planning to increase savings have declined to 27.4% this month, compared to 31.1% in February and 31.0% last year. Consumers planning to decrease overall spending remains relatively flat from last month at 29.2%, as do those anticipating paying with cash more often (20.2%).

Investor confidence in the stock market declines in March…62.7% contend they would definitely/probably invest, down from 69.4% last month. Similarly, only 11.0% of investors plan to buy stocks in the next three months, down from 13.7% in February…5.6% plan to sell, declining almost half a point from last month (6.0%).

With AAA estimating that gas prices have increased more than $0.30/gal. in the last month to $2.549, less confident consumers predict that this trend will continue…more than three-quarters (75.8%) contend the price of gas will increase through Easter, about a fifth (21.6%) think they’ll remain the same, while the great minority (2.6%) optimistically foresee a price decrease. And as Easter approaches, drivers are expecting a pump prices to hit $2.82, much more than the $2.37 estimated on St. Patrick’s Day.

While it’s likely that most didn’t enjoy conducting research for projects in school, it appears that at least some investigative habits rubbed off on consumers into adulthood, as a whopping 89.4% of consumers proclaim that they regularly or occasionally research products online before purchasing them in a store. These tech-savvy fact finders are most likely to research Electronics (41.1% say so), followed by Appliances (19.8%), Apparel (19.7%), Medicines/Vitamins (16.3%), and Home Improvement Items (16.1%).

Perhaps more thorough research has led to a schooling on fashion that has refined consumers’ tastes…in March almost half (45.1%) declare that familiar clothing labels are important to them, a rise from 39.7% in ’06. Additionally, almost a fifth (17.3%) say they prefer the newest trends and fashion styles, up from 13.6% last month and 11.2% last year. Close to the majority (48.7%) of consumers prefer value and comfort in fashion (declining from 56.0% last year), while a third (33.9%) favor a traditional conservative look.

But is discount shopping for apparel becoming passé? In March, 12.5% indicated that they shop most often for Women’s Clothing at Wal-Mart, declining from 16.9% last year. Meanwhile, Kohl’s (7.1%), JC Penney (6.1%), and Macy’s (5.1%) continue year-over-year share gains, while #5 Target remains relatively flat (2.8%).

The Wal-Mart customer rollback continues in Men’s Clothing as well…this month, 14.6% indicate that they shop Wal-Mart most often for Men’s, an almost five point decrease from last year (19.1%). Conversely, competitors JC Penney (8.4%), Kohl’s (6.9%), and Macy’s (4.5%) continue to gain from last year…#5 Sears (3.5%) remains flat.

Are the Shoe Wars no more? The battle for the top spot in footwear used rage on between Payless and Wal-Mart, but it appears that both retailers have retreated in recent months…currently, Payless (with 12.0% share) comes out ahead of the big W (11.1%) as the store shopped most often for Shoes, but shares have declined from 14.4% and 14.1%, respectively, from last year. So, these current distant competitors may have a chance to become rising stars: Kohl’s (3.6%), JC Penney (2.9%), and Macy’s (2.8%).

Continuing the saga in the softlines…Wal-Mart currently leads in the Linens/Bedding/Draperies (L/B/D) category with 18.9%, though more than one in ten (10.3%) shop big box Bed Bath & Beyond most often, followed by JC Penney (7.7%), Linens ‘n Things (5.8%), and Target (5.4%). But, savvy insiders should take a page from our monthly Retail Ratings Reports (available for 11 major retail categories)…you’ll see that Wal-Mart’s share among women in L/B/D is on the decline: www.bigresearch.com/cast-members/big-rrr-linens-feb07.pdf.

When it comes to endorsing the store shopped most often for L/B/D, among the top 8 stores, Wal-Mart’s current shoppers are the most unlikely to recommend the discounter to others. Using the Net Promoter Score (NPS), respondents were asked likelihood that they would recommend the store they currently shop most often for L/B/D to friends or colleagues on a scale of 1 (Not at All Likely) to 10 (Extremely Likely). Wal-Mart’s current customers gave the store a NPS of -25.1%, compared to those shopping Bed Bath & Beyond (12.0%) and Linens 'n Things (8.1%):
(Retail Chart 1, right)

So why does a customer choose a particular store for L/B/D? Price appeals to 64.4% of consumers, followed by selection (47.0%), quality (40.6%), and location (33.0%). Specifically, the overwhelming majority of Wal-Mart shoppers (91.0%) choose the discount king based on price, while shoppers opt for selection with Bed Bath & Beyond (77.1%) and Linens ‘n Things (78.2%). 72.9% of Macy’s customers say they shop the department store for quality.

So, can Wal-Mart can the discounter hold its lead in L/B/D for long? According to this month’s Consumer Migration Index (CMI) for L/B/D. 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 falters slightly with a -0.5 rating, while Bed Bath & Beyond and Linens ‘n Things continue to build their customer bases, with +2.8 and +2.2 ratings, respectively:
(Retail Chart 2, right)

High prices motivated one-quarter (24.5%) to seek another L/B/D store, followed by inconvenient location (15.5%), poor selection (12.3%), and poor quality (7.7%).

When it comes to filling their stomachs, consumers are most likely to fill their carts at Wal-Mart…13.8% shop the discounter most often for Groceries, followed by traditional grocers Kroger (5.5%), Safeway (3.2%), Publix (3.1%), and Albertsons (2.3%).

And, almost a third (27.4%) prefer to shop the big discounter for Health & Beauty Care…Wal-Mart leads CVS (7.5%), Walgreens (7.4%), Target (6.0%), and Rite Aid (2.1%).

However, it appears that druggists still have the cure for the not-so-common cold…Walgreens (15.5%) and CVS (13.9%) lead Wal-Mart (8.2%), Rite Aid (4.7%), and Eckerd (2.0%) as the stored shopped most often for Prescription Drugs.

Confidence may be down, but the 90 Day Outlook continues to brighten from February for most retail categories…according to the BIGresearch Diffusion Index (those who say they’ll spend less subtracted from those who’ll spend more), while home décor categories decline from last month, all major categories improve from ’06:
(Future Prices Chart, right)

Good news for dealers looking to move some of those “old” 2007 models off their lots: purchase intentions for autos are on the rise…12.6% intend to buy in the next six months, an increase from 12.1% in February and 11.5% from last year. DVD/VCR and stereo equipment up slightly…computers, house, RV/boat, TV, and digital camera flat, while vacation travel, furniture, home appliances, jewelry/watch, and major home improvements down.

There may be many consumers willing to go green in March…hybrid autos are what’s hot this month, according to 63.5%... 24 and Ellen DeGeneres follow. March Madness scores particular well among the men, while women might rather attend a destination wedding. What’s Not? 80% of consumers hope the nautical look for women’s clothing gets lost at sea.