NEW CANAAN, Conn. — Not long after Deloitte released gloomy predictions for consumer spending in 2012, another firm is out with a more sunny forecast. Retail sales will increase by 5.7% in 2012, according to a new report by Customer Growth Partners, a consulting and research firm serving retailers, vendors and institutional investors.
The report, “The Great Consumer Reset/The Great Retail Reset,” finds that falling household and credit-debt levels, along with higher savings rates, are fueling consumer spending.
“After sharply ratcheting down expenditures in 2008-09, consumers have indeed resumed spending, amazingly enough, at about the same 5% year-over-year growth rate seen prior to the recession,” said Craig Johnson, president, Customer Growth Partners. “In short, American consumers have now completed a historic ‘reset’, fueling the strongest retail rebound seen in decades.”
Similarly, retailers have had their own “reset,” according to the report. It notes that beginning in the mid -2000’s, after decades of overexpansion, retailers sharply curtailed store development plans, closed rafts of underperforming stores, cut overhead and staff costs, and redirected growth strategies more online.
“Merchants that did bite the bullet during the recession have found that their prudent pruning has been rewarded with new growth — and sharply higher store productivity,” Johnson said.
To read the report, click here.