Chicago According to a study released Wednesday by accounting and consulting firm BDO USA, LLP, 82% of CFOs at leading U.S. retailers anticipate a continuation of stagnant economic conditions as opposed to a double dip (9%) or an ongoing turnaround (9%).
The Retail Compass Survey of CFOs found that the majority (78%) of retail CFOs cite an ongoing economic turnaround as most dependent upon lower unemployment or consistent improvement in consumer confidence and spending. In contrast, 10% cite a rebound in the housing market and 9% cite continued rebound in the United States and global financial markets as contingencies for an economic turnaround.
Only two respondents said they believed the success of the Financial Reform Bill will influence an ongoing turnaround.
Unemployment seems to be the linchpin to retailers’ recovery; 76% cite it as the economic issue having the greatest impact on consumer confidence for the balance of 2010 (a jump from 64% in 2009). The impact of personal credit availability and debt levels (14%), the weak housing market (4%) and market volatility (4%) are also playing a role.
“Even with the slight improvements we’ve seen in recent consumer confidence numbers, the weak job market is darkening consumer’s long-term outlook. Retailers simply cannot answer the question ‘what will improve the job market in the U.S.?’” said Al Ferrara, national director, Retail & Consumer Product Practice at BDO USA. “An unemployment rate of 9.6% shows that a pint size recovery persists. In addition, the back-to-school season proved that offering deep discounts and value-oriented items remains critical.”
BDO USA, LLP’s Retail Compass Survey of CFOs examined the opinions of 100 CFOs at leading retailers located throughout the country. The retailers in the study were among the largest in the country, with revenues ranging from $100 million to $100 billion. The survey was conducted in August and September 2010.