Chicago A survey released Tuesday by accounting and consulting firm BDO USA, LLP found that chief marketing officers at leading U.S. retailers expect same-store and overall sales to increase by 2.83% and 3.51% respectively, for the 2010 holiday season, compared with holiday 2009 projected upticks of 1.4% same-store and 2.6% overall sales.
According to the BDO USA Retail Compass Survey of CMOs, which examined the opinions of 100 retail chief marketing officers, CMOs say they increased their inventory purchases by 2.8%. More than one third (33%) of CMOs say their inventory purchases have measurably increased since last year and only 16% of retailers are citing a decrease. Stable inventory levels have been largely reported, with 52% of CMOs saying their volume has stayed about the same.
“Retailers appear more optimistic for the 2010 holiday season, a sign of the industry’s resilience,” said Doug Hart, partner, retail & consumer product practice of BDO USA. “Retailers expect the recent positive momentum to continue now that consumer spending is gradually improving. While retailers continue to carefully manage inventory levels, some are planning to broaden product offerings for the 2010 holidays, a major change from 2009.”
Other major findings of the survey, which polled large retailers with revenues ranging from $100 million to $100 billion, included: Shoppers could expect to see a little more variety in stores this year; though likely from a select number of brands as strict inventory management remains critical. When it comes to SKUs for the upcoming holidays, CMOs say they have increased by .88%. More than one-third (31%) of CMOs say they are increasing their SKUs while 45% are making no change. Only 16% of retailers are decreasing their SKUS for the 2010 holiday season.
More than half (52%) of CMOs expect their overall sales for the 2010 holiday season to increase compared to last year and many (36%) expect sales to remain steady. Only 13% of CMOs expect 2010 holiday sales to decrease. This shows growing optimism for the sector since 2008, when 40% expected a decrease, accurately predicting a 2.8% decline. In 2009, actual holiday sales rose 1.1%.
Projecting a 2.83% increase in same-store sales, retailers are strengthening their outlook from 2009 when they forecasted only a 1.4% increase. Almost half (48%) of CMOs say same-store sales will increase, while 43% of CMOs say sales will be flat when compared with 2009. Only 8% of CMOs expect flat same-store sales this year, an increase from last year (10%) and drastic reduction from 2008 (39%).
More than half (53%) of CMOs say stagnant consumer spending and low confidence levels will have the greatest impact on 2010 holiday sales. While still a concern, unemployment (22%) carries less weight on holiday sales this year, a notable decrease from 2009 (67%).
Of the retailers who sell gift cards, 47% expect an increase in sales this holiday season. Forty percent expect flat sales and only 13% of CMOS expect a decrease in gift card sales.