As the economy has weakened over the past year, Gap Inc. (NYSE: GPS) has seen a gradual shift in spending behavior among the customers at its stores Banana Republic, The Gap, and Old Navy. While all three have seen substantial growth, the increase has been far more impressive at the inexpensive Old Navy. Not surprisingly, growth in customer expenditure has been slowest at the more expensive Banana Republic.
According to data collected by the Geezeo Main Street Spending Index [MSSI], in November 2007 shoppers spent an average of $109.95 at Banana Republic, $86.74 at The Gap, and $60.21 at Old Navy.
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One year later, the balance has shifted substantially. While Banana Republic and The Gap have shown steady growth in expenditure per customer (20% and 28% from November 2007 to November 2008), Old Navy’s growth has been truly exceptional. The average Old Navy customer spent $101.23 in November 2008, up an impressive 68% from the same period last year.
Where has this growth been coming from? The steady increase in customer spending at Gap Inc.’s other properties suggests that it may be coming at the expense of competing chains. Next week, we’ll take a look at whether this is the case.