Press Release |
U.S. Retailers Forecast a 1.4% Increase in Comparable Store Sales This Holiday Season According to BDO Seidman, LLP Survey of CMOs
* Reuters is not responsible for the content in this press release.
- 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 2009. 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 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 issues. 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. BlissPR Paige Holden or Rachel Gerber, 212-840-1661 firstname.lastname@example.org email@example.com Copyright Business Wire 2009