U.S. Retailers Forecast a 1.4% Increase in Comparable Store Sales This Holiday Season According to BDO Seidman, LLP Survey of CMOs

Mon Nov 2, 2009 9:00am EST

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- Sixty Percent of the Top 100 Retailers Surveyed Expect an Economic Turnaround
by the Second Quarter of 2010 -
CHICAGO--(Business Wire)--
According to BDO Seidman, LLP, one of the nation`s leading accounting and
consulting organizations, chief marketing officers (CMOs) at leading U.S.
retailers expect both overall sales and comparable store sales to increase by
2.6 percent and 1.4 percent, respectively, for the 2009 holiday season. Last
year, the retailers included in the BDO Seidman Retail Compass Survey of CMOs
predicted that overall sales for the 2008 holiday season would decrease by 2.8
percent - and they were right. According to the National Retail Federation, 2008
holiday retail sales were down 2.8 percent from the 2007 holiday season. 

The retailers surveyed do have a positive outlook for the coming year. Sixty
percent of CMOs from the top 100 retailers surveyed say they expect to see a
meaningful turnaround in the economy by the second quarter of 2010. The vast
majority of the retailers (77%) and nearly all of the retailers in the top 100
(85%) predict a turnaround before the third quarter of 2010. 

Virtually all CMOs (96%) expect to offer more discounts and promotions this
holiday season, which is up from 88 percent last year and 73 percent in 2007.
Most of the CMOs (50%) cite that those discounts will take the form of in-store
promotions, followed by markdowns (41%) and online promotions (9%). Further,
more than half (54%) of the retailers say they have reduced their inventory
purchases for the holiday season. Those that reduced inventory did so by an
average of 10 percent, reflecting a sizeable decrease in inventories. 

"Retailers remain cautious about the 2009 holiday season. While some Chief
Marketing Officers have expressed optimism, unemployment is still a major
concern and a majority of retailers are planning more discounts and promotions
than last year," said Doug Hart, a Partner in the Retail and Consumer Product
Practice at BDO Seidman. "However, retailers` inventories are leaner going into
the 2009 holidays. As a result, we can expect less panic this year - discounting
will likely be moderate and more strategic than the deals we saw last year." 

These findings are from the most recent edition of The BDO Seidman Retail
Compass Survey which examined the opinions of 100 chief marketing officers at
leading retailers located throughout the country regarding their expectations of
the 2009 holiday shopping season. The retailers in the study were among the
largest in the country, excluding automotive dealers and restaurants, with
revenues of more than $100 million, including 20 percent of the Top 100
retailers based on annual sales revenue. The survey was conducted in October of

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
* 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 Surveyis 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). 

BDO Seidman, LLP has been a valued business advisor to retail and consumer
products companies for almost 100 years. The firm works with a wide variety of
retail clients, ranging from multinational Fortune 500 corporations to more
entrepreneurial businesses, on a myriad of accounting, tax and other financial

About BDO Seidman, LLP

BDO Seidman, LLP is a national professional services firm providing assurance,
tax, financial advisory and consulting services to a wide range of publicly
traded and privately held companies. Guided by core values including,
competence, honesty and integrity, professionalism, dedication, responsibility
and accountability for almost 100 years, BDO Seidman provides quality service
and leadership through the active involvement of our most experienced and
committed professionals. 

BDO Seidman serves clients through 37 offices and more than 400 independent
alliance firm locations nationwide. As a Member Firm of BDO International, BDO
Seidman, LLP serves multi-national clients by leveraging a global network of
1,095 offices in 110 countries. BDO International is a worldwide network of
public accounting firms, called BDO Member Firms. Each BDO Member Firm is an
independent legal entity in its own country.

Paige Holden or Rachel Gerber, 212-840-1661

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