FINANCE

Survey: Retail CFOs more optimistic about industry and economy

BY Katherine Boccaccio

Norwalk, Conn. — The CFOs of U.S. middle-market retailers are more optimistic about the current state of their own industry and the U.S. economy, although they are significantly more pessimistic about the global economy, according to the latest GE Capital U.S. Mid-Market Survey.

Fifty-one percent of retail CFOs say their industry will grow over the next 12 months — an increase of 25% over the previous wave of this survey, which was conducted in the third quarter of 2011.

In fact, retail CFOs are the second-most optimistic of those surveyed, just behind executives of metals and mining companies (54%).

“Consumers are slowly returning to the market and we’re seeing this shift reflected in an increase in CFO optimism about the current state of the U.S. economy and the outlook for the retail industry,” said Jim Hogan, senior managing director, GE Capital, Corporate Retail Finance. “Although still cautious, we are seeing an increase in retailers who are moving out of survival mode and seeking finance to reinvest in and grow their businesses.”

Not surprisingly, retail CFOs believe labor costs and energy costs, including oil and gas, will have the most significant impact on their business this year. At the same time, they’re investing in their businesses; retail CFOs expect to spend more on equipment and general capital expenditures this year.

Additional retail industry survey findings include:

Revenues: Seventy-four percent expect their company’s revenues to increase this year — a 16% increase over the previous wave of this survey, which was conducted in third quarter 2011.

Profitability: Thirty-eight percent predict profit margins will increase this year, up from 30%, while 44% expect profit margins will stay about the same this year.

Capital expenditures: Fifty-four percent said their capital expenditures will be about the same this year as last year — a 16 percentage point increase from third-quarter 2011.

Pricing: Fewer retail CFOs plan to increase the price of their products or services this year (48% compared to 58% in the third quarter of 2011).

Growth areas: Seventy-two percent of retailers expect the discount category to be the biggest area of consumer spending this year, unchanged from the previous survey. Twelve percent of retail CFOs chose the aspirational category (up from 6%) and the luxury category (down from 20%) to be the biggest area of consumer spending.

Inventory: Sixty-two percent expect inventory levels to remain the same this year, while 26% said they would increase. The average expected inventory increase through the remainder of the year is 10%, unchanged from third-quarter 2011.

Hiring: Seventy-two percent expect to hire in the next 12 months and anticipate increasing their workforce by 4%.

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FINANCE

Online retail sales up 6% in March

BY Katherine Boccaccio

Armonk, N.Y. — A report released Tuesday by IBM found that the U.S. online retail sector grew more than 6% in March 2012. This upswing in March closes a quarter in which online sales were down slightly from the same period in 2011.

IBM’s online economic indicator identified several trends of importance to chief marketing officers, e-commerce leaders and customer service professionals. The most notable development over this first quarter period was the continued growth of mobile commerce which resumed the momentum established in December by accounting for 13.3% of online retail sales, double the number seen in first quarter 2011.

In addition to sales, the economic indicator identified growth in positive consumer sentiment around key attributes of a successful buying experience. Specifically focused on department stores, the indicator found consumers are increasingly optimistic when it comes to convenience, experience and overall value, each up from this same period last year. Businesses are increasingly looking to analyze social media to assess the way their customers view them.

Highlights of the report include:

  • Online retail sales for first quarter were down 1.9% year-over-year, but grew by 6.3% from February to March 2012;
  • Mobile devices comprised 17.1% of all online sessions, exceeding the 6.1% witnessed over this same period in 2011;
  • Sales from mobile devices reached 13.3%, up from the 7% in first quarter 2011;
  • Apple’s iPhone continued to rank one for mobile device retail traffic at 6.5% with Android taking second at 5.9%. iPad came in third at 5.3%;
  • Shoppers referred from Social Networks generated 1.1% of all online traffic over first quarter 2012, matching 2011; and
  • Shoppers referred to retailer sites from Social Networks generated 2.4% of all online sales over first quarter 2012, an increase from the 1.7% seen over this period last year.

For online retail categories year-over-year:

  • Apparel stores maintained strong December momentum with first quarter sales growing 14.9%;
  • Department stores continued to catch the attention of consumers with sales growing 20.4%;
  • Health & Beauty sales grew by 28.8%;
  • Home goods experienced a 29.3% increase in sales in the first quarter with consumers continuing to shop for their homes;
  • Jewelry stores continued recent momentum with sales growing by 11.3%;
  • Office Supply/Electronics experienced growth in the first quarter with online sales increasing by 6.6%.
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OPERATIONS

Goodwill sector selects Epicor to support non-profit retail operations

BY Staff Writer

Dublin, Calif. — Epicor Software Corp. said Tuesday that Goodwill Industries of Southeastern Wisconsin has selected the Epicor suite of retail solutions to support its growing retail operations.

Having outgrown its existing retail systems, Goodwill turned to Epicor to support the growth of its retail operations — a key objective for the organization, said Pat Boelter, VP marketing, Goodwill Industries of Southeastern Wisconsin, who says the organization has opened five to six new stores a year over the past several years — a rate of growth that is expected to continue.

“The more successful we are with Goodwill Store & Donation Centers, the more mission programs and services we can provide to the communities we serve,” said Boelter.

Goodwill said it plans to leverage the Epicor Retail CRM solution to help Goodwill collect and track customer data so they can better understand their customers, engaging them in more relevant and meaningful ways moving forward. The Epicor Retail CRM solution will also enhance their Club Goodwill loyalty program, which currently has over 900,000 members, by offering customers additional rewards as they reach targeted spending levels.

Goodwill will also utilize the Epicor Retail Store solution to support more streamlined point of sale transactions for improved customer experience at checkout. It will also provide Goodwill donors with electronic records, making the process of storing paper receipts for tax time a thing of the past.

Additionally, Goodwill will leverage the Epicor Retail Audit and Operations Management suite for transaction data verification and investigation in Sales Audit, and which includes Voucher Management to support the processing and management of Goodwill gift cards.

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