As Consumer Spending Worsens, Sears (SHLD) Moves In The Cross Hairs

Consumer sentiment and consumer spending may be bad today, but according to a major new survey, they are going to get much worse over the next three months. Among the largest victims of the slowdown are Sears (SHLD), Bed Bath and Beyond (BBBY) and Macy’s (M).

New data from research firm ChangeWave shows nearly three-in-five (59%) respondents now say they’ll spend less money over the next 90 days, 7-points worse than previously indicated. The current study of 2,763 US consumers was done from October 27 – November 3. The last report from the firm was done in September. Only one-in-ten (10%) respondents say they’ll spend more – 8-points worse than previously shown.

The analysis also shows, "Consumer Electronics remains one of the weakest of all spending categories, a big change from past holiday seasons when a surge in the sector normally occurs at this time of the year.  Only 19% say they’ll spend more on Consumer Electronics over the next 90 days compared to 43% who say less – a net 40-pts worse than one year ago. "

In terms of major retailers, "For the sixth consecutive survey, Costco (COST; Net Score = +8) and Wal-Mart (WMT; +5) remain the retail leaders going forward. Once again, it’s traditional retailers – Sears (SHLD; -13), Bed, Bath & Beyond (BBBY; -12), Macy’s (M; -10), JC Penney (JCP; -9) and Linens N Things (-8) – that are showing the greatest weakness going forward."

Douglas A. McIntyre