Chicago -- Despite all the headlines about Canadian and global growth, U.S. expansion remains a key growth strategy for retailers, according to a survey of 100 retail chief financial officers by BDO USA.
In the seventh-annual BDO Retail Compass Survey of CFOs, 30% of the executives said U.S. expansion will be their priority growth tactic in 2013, followed by improving merchandise assortment (24%) and e-commerce and mobile commerce (22%).
“The retail storefront isn’t going anywhere just yet,” said Ted Vaughan, partner in the retail and consumer products practice at BDO USA, a professional services firm providing assurance, tax, financial advisory and consulting services. “The opportunities abroad and online are clear, but retail executives still believe that U.S. stores are a core part of the business. In addition to investing in existing stores, we’re also seeing several online brands introduce storefronts for the first time as they look to appeal to shoppers who want to see and try on merchandise in person.”
Many retailers also will be looking to add staff in stores and their corporate offices. Over one-third of CFOs (34%) said the number of employees at their company will increase this year.
Other major findings of the survey include:
• Executive compensation may rise, but performance metrics are important. Attracting and retaining strong leaders is paramount to success as retailers reshape strategy and launch growth initiatives. As a result, 30% of CFOs expect their management’s compensation to increase this year, and only 5% forecast a decrease, despite continued scrutiny around pay packages. Still, a majority of retailers (66%) said their company’s leaders have an incentive plan to tie pay to performance, and 71% reported that a profitability-based metric is the primary measure.
• Regulation and industry competition rank among top risks. A majority of CFOs (34%) cited