BUDGETING BLUES

Highlights from BIG Research's July Economic & Consumer Insights report.

41.7% of consumers say they've become more practical and realistic in purchasing, up four points over the same period last year. 35.2% say there will be more layoffs in the next six months while 53.7% predict the same as today.
26.9% plan to increase savings in the next three months and 35.9% want to pay down debt. 78.2% of 18-34-year olds cite rising gas prices as crunching their budgets vs. 70.6% of those 55 or older.
WOMEN'S CLOTHING SHOPPING, BY INCOME MEN'S CLOTHING SHOPPING
Less than $25,000 per year $25,000-$49,999 per year $50,000-$99,999 per year More than $100,000 per year
1. Wal-Mart 33.5%
2. JCPenney 4.6%
3. Kohl's 4.3%
1. Wal-Mart 24.0%
2. JCPenney 7.4%
3. Kohl's 7.2%
1. Wal-Mart 14.0%
2. Kohl's 14.0%
3. JCPenney 7.9%
1. Kohl's 13.8%
2. JCPenney 7.1%
3. Macy's 6.3%
1. Wal-Mart 18.9%
2. JCPenney 7.7%
3. Kohl's 6.0%
4. Sears 3.7%
5. Target 3.3%

Source: Big Research

TROUBLE BREWING FOR WAL-MART?

According to Merrill Lynch research, many of Wal-Mart's growth metrics are slowing, including new store productivity, which is lagging behind Target. One reason for the slowdown is that more of Wal-Mart's new store openings have been greenfield stores, rather than expansions of its existing stores. The greenfield stores may be cannibalizing existing store sales to a greater degree than Wal-Mart may have expected.

WAL-MART VS. TARGET
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006E
Wal-Mart Sales per SF $332 $354 $375 $387 $406 $422 $429 $435 $436 $434
Productivity 85.20% 67.10% 73.10% 78.20% 95.60% 81.30% 79.30% 84.10% 75.00% 70.50%
Comps 6.10% 9.00% 7.70% 6.00% 6.10% 5.00% 4.10% 3.30% 3.40% 2.40%
Target Sales per SF $245 $251 $264 $271 $272 $276 $281 $286 $298 $312
Productivity 82.30% 83.20% 72.70% 91.30% 66.10% 92.50% 87.40% 77.40% 82.70% 108.60%
Comps 6.00% 6.10% 6.70% 3.40% 4.10% 2.20% 4.40% 5.30% 5.60% 5.00%
WAL-MART'S STORE OPENINGS
2000 2001 2002 2003 2004 2005 2006E
New Stores 213 228 246 278 301 316 318
Greenfield openings 98 105 115 115 128 128 140
% of total 46% 46% 47% 41% 43% 41% 44%
Greenfield Supercenters 58 65 65 65 85 85 115
% of total 27% 29% 26% 23% 28% 27% 36%

Sources: Merrill Lynch estimates, company information