Chicago About 69% of CFOs at leading U.S. retailers are worried about tax reform as a result of the 2008 presidential election, according to a recent study by BDO Seidman, LLP, an accounting and consulting organization.
Consumer confidence is also top of mind, with 57% of CFOs citing high fuel costs as the issue having the greatest impact on consumers so far in 2008, up by 10% from the first half of 2007.
Looking forward to the balance of 2008, fewer CFOs (47%) cite fuels costs as having the greatest impact on consumer confidence, as CFOs report concern over other consumer issues, including the housing market (28%), the election (13%) and inflation (11%).
With regard to the recent economic slump, 47% of the CFOs are predicting that the economy will experience a turnaround by July of 2009, with the highest concentration of CFOs (28%) citing the second quarter as the most promising.
“Last year, we saw consumers start to pull back when the economy weakened, but fuel costs skyrocketed in the first half of 2008, draining consumers’ discretionary income and spurring a perfect storm of economic factors that have lead us to the current recessionary climate,” said Al Ferrara, a partner in the retail and consumer products practice at BDO Seidman.
“Retailers may remain wary for the rest of the year, as consumers stretch their dollars to cover inflation and, of course, heating bills,” Ferrara said. “Further, on top of shrinking margins, it is also an election year and most retail CFOs are very concerned about higher tax payments and fewer incentives as a result of any tax reform.”