U.S. Retailers Forecast a 1.4% Increase in Comparable Store Sales This Holiday Season
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Some of the major findings of The BDO Seidman Retail Compass Survey of CMOs:
- CMOs Less Pessimistic on Overall Sales. Forty-seven percent of CMOs expect overall sales to increase this holiday season when compared to last year, while 41 percent predict sales to be flat and only 12 percent say sales will decrease. Optimism is especially strong among the top 100 retailers – 65 percent of the top 100 retailers surveyed expect sales to increase this holiday season. Last year, only 15 percent of the CMOs expected sales to increase, while 45 percent said sales would be flat and 40 percent predicted sales to be down.
- Expectations for Some Recovery in Comp Store Sales. When it comes to comparable store sales, 43 percent of the CMOs say sales will increase, while 47 percent expect sales to be flat and only 10 percent predict a decrease. Perhaps a sign of light at the end of the tunnel, these figures are close to the 2007 predictions where 41 percent predicted an increase in sales, 54 percent said sales would be flat only 5 percent cited a decrease in sales. Last year, only 20 percent of the CMOs thought sales would increase, while 41 percent expected sales to be flat and 39 percent said sales would be down.
- Retailers Must Consider Jobless Americans. When asked to pick one external issue that will have the greatest impact on the holiday shopping season, more than half (67%) of the CMOs, including 80 percent of the top 100 retailers, cite unemployment as the most critical issue. Other key issues are personal credit availability (17%), weak housing market (9%), energy and fuel costs (5%) and turmoil in the financial markets (2%). Last year, in the aftermath of the banking crisis, more than half (54%) of the CMOs cited uncertainty in the financial markets as their chief concern. Other issues cited were high energy and fuel costs (25%), unemployment (10%), the weak housing market (8%) and the Presidential election (3%). In 2007, opinions were mixed, but a majority (27%) of the CMOs viewed credit concerns as the number one concern.
- Top 100 Retailers Bullish on Turnaround. Sixty percent of the CMOs from the top 100 retailers surveyed say they expect to see a meaningful turnaround in the economy by the end of the first quarter of 2010, with 40 percent expecting it in the fourth quarter of 2009 and 20 percent in the first quarter of 2010. One quarter (25%) of the top 100 retailers percent predict the turnaround will happen in the second quarter of 2010, totaling 85 percent of the top 100 retailers that think a turnaround will happen in the first half of 2010.
- Retailers Setting Sights on 2010 Turnaround. Of the retailers surveyed, 24 percent of the CMOs expect a turnaround to occur in the fourth quarter of 2009, 21 percent say the first quarter of 2010, 32 percent cite the second quarter of 2010 and 23 percent expect a turnaround to occur in the third quarter of 2010 or later.
- Improvement in Employment Rates Critical to Turnaround. Nearly half (47%) of retailers say that an economic turnaround will be most dependent on lower unemployment, which is up from six percent of retailers who cited lower unemployment in 2008. Other responses included a lift in consumer confidence (25%), a rebound in the housing market (14%), increased personal credit availability (9%), lower energy and fuel costs (3%) and a turnaround in the financial markets (2%). Last year, in the midst of the financial market meltdown, more than a third (35%) of retailers said that an economic turnaround would be most dependent on increased stability in the financial markets.
The BDO Seidman Retail Compass Survey is a national telephone survey conducted by Market Measurement, Inc., an independent market research consulting firm, whose executive interviewers spoke directly to chief marketing officers, using a telephone survey conducted within a scientifically-developed, pure random sample of the nation's largest retailers (with revenues ranging from over $100 million to billions of dollars).
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