SUPPLY CHAIN

Survey: Importers preparing for surge in consumer spending

BY Marianne Wilson

New York — Importers who sell to America’s major retailers are preparing for a significant uptick in consumer spending this spring and summer according to a recent survey conducted by Capital Business Credit, (CBC), a non-bank lender that services the retail sector.

According to the quarterly Global Retail Manufacturers and Importers Survey, 43.2% of respondents believe that the 2012 spring season will be stronger than 2011, and 40% believe that the 2012 summer season will surpass last year’s sales. And in more good news, fears of a double dip seem to be declining — an additional 40% of respondents believe that the spring and summer retail seasons will be at least as robust as last year’s.

“Retailers have played it very close to the vest for the past several years, fearful of overstocking the shelves. As consumers begin to open their pocketbooks again, importers and manufacturers are finally beginning to see increases in orders and re-orders. This is indicative that a stronger retail and economic recovery is underway,” said Andrew Tananbaum, executive chairman of CBC.

Forty percent of respondents indicated that retailers ordered more merchandise for the spring season as compared to last year; 20% reported that orders stayed the same. An overwhelming 78.3% cited that they are receiving re-orders for spring merchandise — demonstrating stronger consumer demand than was initially anticipated.

Additional results revealed:

  • Of those respondents who experienced an uptick in spring orders, 47% indicated that retailers ordered 3% to 5% more merchandise, and nearly a quarter (23.5%) indicated that customer orders increased by 10% or more.
  • Half of the respondents indicated that prices of consumer goods increased this spring season, while 35% believe they stayed the same.
  • • While demand is increasing, margin pressures remain, with 62% of respondents citing that retailers are still relying on discounting to move product off the shelves.

“While increases in orders are important, retailers are still relying on heavy discounting to move merchandise which is affecting margins across the board,” Tananbaum continued. “Retailers are going to need to work hard to re-train consumers to rely less on discounts.”

Tananbaum added that is the first time in nearly three years that the importers CBC works with are manufacturing more than they did last year and are planning on having to restock shelves.

Looking further ahead, 37% of respondents indicated that they are seeing an increase in orders for the summer season. The overwhelming majority (81.8%) believe that the summer season will perform better than, or as well as, 2011.

CBC polled more than 50 manufacturers and importers for the survey. Respondents consisted of manufacturers and importers in the apparel, housewares, home furnishings, fashion accessories and furniture industries who manufacture some, if not all, of their products in China, India, Vietnam, Bangladesh, Pakistan and the United States.

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J.Smith says:
Sep-09-2012 01:30 pm

Paradox – does this word work
Paradox – does this word work for this type of news. So who will pay their bills on time, who will pay their mortgage on-time, whoever spent this money on whatever endeavor can they pay it back. I rather see less spending on all fronts to make me confortable that another person or persons has NOT gone beyond their means. Good news for the economy, retail businesses, me, you please expain to me what am I missing; a surge in consumer confidence, less umemployment as a result of the best spending since 2001. http://bit.ly/N1y0Iq

J.Smith says:
Sep-09-2012 01:30 pm

Paradox – does this word work for this type of news. So who will pay their bills on time, who will pay their mortgage on-time, whoever spent this money on whatever endeavor can they pay it back. I rather see less spending on all fronts to make me confortable that another person or persons has NOT gone beyond their means. Good news for the economy, retail businesses, me, you please expain to me what am I missing; a surge in consumer confidence, less umemployment as a result of the best spending since 2001. http://bit.ly/N1y0Iq

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News

Safeway joins USDA on national health-and-wellness communication initiative

BY CSA STAFF

PLEASANTON, Calif. — Safeway has joined forces with the U.S. Department of Agriculture’s Center for Nutrition Policy and Promotion on an initiative to develop and promote dietary guidance that links scientific research to the nutrition needs of consumers.

"Empowering our shoppers and employees to make the right nutritional choices for themselves and their families is paramount in the way we do business," Safeway chairman, president and CEO Steve Burd said. "We are very excited about the USDA partnership as it underscores our commitment to health and wellness and provides a natural extension to the work we’re already doing to help Americans make informed, healthier choices when shopping in our stores and in their daily lives."

As one of the largest national grocery chains to become a national strategic partner in the CNPP’s Nutrition Communicators Network, Safeway will help drive the group’s food retail-based effort. "Retailers are critical to helping our vision become a reality because they have the opportunity to impact and educate consumers at the store and on the shelf," noted Robert Post, deputy director of USDA’s CNPP. "We look forward to partnering with Safeway and embrace the expertise they bring to our efforts in encouraging Americans to adopt a healthier lifestyle."

Safeway already has implemented programs designed to educate consumers on healthy living. For example, its proprietary SimpleNutrition shelf tag system helps shoppers quickly make food and beverage choices that meet the nutritional needs of their families. Safeway is also developing a fun and educational in-store tour program for kids spotlighting the major food groups and further establishing USDA MyPlate messages.

In addition, Safeway has been making its pharmacists available to offer education and consultation for a broad range of needs such as proper utilization of over-the-counter and prescription products, preventive care (including immunization services) and management of such chronic diseases as diabetes, the grocer said.

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FINANCE

DSW Q4 profit beats Street, on track to open up to 40 stores this year

BY Katherine Boccaccio

Columbus, Ohio — DSW Inc. reported Tuesday that profit for the fourth quarter rose to $19.4 million from $200,000 a year earlier, beating analysts’ estimates for the quarter.

Fourth-quarter revenue rose 10% to $513.7 million, surpassing Wall Street’s estimated $511.2 million in revenue. Same-store sales increased 5.6%.

For the full year, net income was $174.8 million, compared with $17.8 million the year before. Results included a one-time gain from the footwear retailer’s merger with Retail Ventures. Full year sales increased 11.1% to $2.02 billion; comparable sales increased 8.3% in 2011.

The retailer said it plans to open 35 to 40 new stores in 2012. “Our new stores continue to perform well and, with our strong balance sheet, we are well-positioned to continue to pursue our growth strategies,” said Mike MacDonald, president and CEO, DSW Inc.

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