Thursday focus: Shopping life

With retailers reeling from the global recession, initiatives such as Wal-Mart Stores Inc.’s Great Value private-label expansion or Macy’s Inc.’s “My Macy’s” will likely be adopted by even more retailers.

Retailers also will likely downsize their packaging, store sizes and growth expectations as part of a long-term trend to emerge from the economic downturn that’s changed consumer behavior, according to a joint report of consulting firms Pricewaterhouse Coopers and Retail Forward.

Retail sales, excluding automobiles and gasoline, are expected to be flat this year before rebounding in 2010.

In response to rising job losses and the declining stock and housing markets, three-quarters of consumers have significantly or somewhat changed their shopping behavior – trimming purchases, increasingly seeking deals and coupons, and trading down to cheaper store brands, according to the Retail Forward survey of 4,000 U.S. primary household shoppers.

That has forced retailers to change their game plan, the report said.

“The economic shocks will precipitate the end of many cycles that shaped the industry during the first part of the decade,” the report said.

Value brands: Wal-Mart this month reintroduced its Great Value brand, first unveiled in 1993, with expansion into 80 new products, from organic cage-free eggs to thin-crust pizza. Grocery has been a key traffic driver for Wal-Mart as consumers lower their discretionary spending, analysts have said.

In addition to Wal-Mart, Best Buy Co. and Kohl’s Corp. have also expanded their private label offerings, as “trading down to private brands is among the most prevalent changes in shopping behavior,” the report said.

As consumer-spending cutbacks lead to less room for retail expansion, more stores also will follow the lead of retailers such as Macy’s, which is rolling out its My Macy’s initiative nationwide to tailor its merchandise to specific customer segments and local markets instead of relying on adding stores to spur growth, the report said.

Shopping smart: Consumers’ increased access to information through smart phones and other devices also will change the retail landscape, as shoppers rely increasingly on product ratings and reviews.

MarketWatch