Boston, MA – November 12, 2009 – Results from the newly released semi-annual L.E.K. Consumer Sentiment Survey showed that while consumer sentiment and household spending appear to have stabilized, perceptions of value have evolved and will continue to influence consumer behavior going forward.

A new emphasis on value is evident despite signs pointing to an emergent recovery on the horizon. Although numerous economists have suggested that American consumers will return to their old shopping habits as the economy recovers, L.E.K.’s newest data may suggest otherwise.

L.E.K.’s survey of more than 2,000 households indicates that consumers are proactively striving to maximize value for each dollar—a trend that is directly and dramatically benefiting discount retailers like Walmart. In fact, while consumer sentiment is tracking close to 30 percent higher than it was in Q1 2009, L.E.K.’s research shows that consumers claim, on average, that they have begun shifting as much as 3% of their collective wallet share to Walmart across the majority of key categories tested (e.g., toys, groceries, apparel, etc.).

Key findings of the latest L.E.K. Consumer Sentiment Survey include the following:


  • More than half of consumers surveyed believe they will see an economic recovery in their personal household occur within 13 months (or less).
  • Consumer spending has been relatively flat since April 2009, which marked the end of the spending declines.
  • Walmart continues to gain traction across several key categories, and has seen increased penetration among older families and consumers within higher income brackets—particularly among those with annual incomes between $100,000 and $150,000.
  • Respondents believe Walmart offers a perceived savings of eight to 10 percent.
  • As a result, consumers suggest that retailers would have to decrease “perceived prices” by six to seven percent on average to motivate a return to their stores.
  • Toys, groceries and children’s apparel represent the categories that shifted most to Walmart.
  • While concern over job stability has diminished since April, about half of consumers are still worried about losing their job.

The L.E.K. Consumer Sentiment Survey results indicate that this shift to Walmart for lower prices occurred despite dissatisfaction with other elements of the shopping experience. “As the economy begins to show signs of stabilization and recovery, consumers have become more positive, but are emerging with new attitudes and shopping behaviors,” said Andrew Rees, vice president and head of L.E.K.’s retail and consumer products practice. “We have found that consumers now appear more willing to make sacrifices in selection and shopping convenience to better manage their budgets versus two years ago.”

This shift is also evident in higher income groups. Respondents indicated a willingness to sacrifice quality in favor of savings in a post-recession economy. While many economists are predicting an economic recovery that will positively influence consumer spend, the L.E.K. Consumer Sentiment Survey indicates that to be only half of the story. Spending levels are inching back up, but new shopping habits appear to be more static.

“Walmart’s newest customers are demonstrating loyalty to their newfound method of dollar-stretching,” said Rees. “That may come as welcome news to the retail giant, but competing retailers could find this bit of post-recession medicine hard to swallow,” he added. In fact, respondents indicated that the perceived price differential between Walmart and competitive retailers would have to be cut substantially from where it is today to reverse the share shift.

The latest L.E.K. Consumer Sentiment Survey was fielded from September 24 to September 29, 2009 to better understand consumer attitudes and spending behaviors. The sample was demographically representative of the U.S. population over 18 years of age. To assess relative attitude and behavior changes, three previous studies conducted by L.E.K. were leveraged. In addition to questions regarding consumer spending and sentiment, the survey explored the effectiveness of promotions, and also evaluated consumers’ favorite loyalty programs to better understand what consumers like and what improvements they want to see.

“The lesson for retailers is that the best way to win a consumer in this economy is not through the heart, but rather through the wallet,” said vice president of L.E.K. and co-author of the study, Dan McKone. He noted, “Effective communication of value is absolutely critical if retailers are to compete with Walmart in this environment, Indeed, given the strong indications from some customer segments that their shopping behavior changes may be permanent, retailers may need to substantially rethink their pricing strategy.”


For full details of this study or to schedule an interview with authors Andrew Rees or Dan McKone, please contact

About L.E.K. Consulting

L.E.K. Consulting is a global strategy consulting firm that specializes in corporate strategy, transaction services, and performance improvement. Founded in 1983, L.E.K. currently employs over 900 professionals in 20 offices worldwide. Global clients include Fortune 500, FTSE 100, Eurotop 300, and many of the largest firms in Asia-Pacific. With a reputation for solving the most complex issues, L.E.K. collaborates with business leaders to accelerate the pace and precision of strategic decision-making.

As a leading advisor to the Retail & Consumer Products industry, L.E.K. works with senior executives looking to enhance profit performance through the development and execution of long-term growth strategies, services enhancement, merchandise management, new product development and execution and operational effectiveness.

Walmart Continues to Grow Its Share of America’s Wallet