Middle market retail executives don’t think much of the overall economic recovery – but they do expect their own companies to improve faster than the industry as a whole.
That’s the word from the third annual retail finance outlook study released by the CIT Group Inc.
While most retailers think business will improve, they are still cautious about adding staff, building inventory and assessing the availability of credit – particularly for their customers.
“Retail executives maintain a sense of optimism about their own business growth prospects, even while they continue to sour on the idea of a quick U.S. recovery,” said Burt Feinberg, group head of CIT Commercial and Industrial. “This study highlights some of the key factors affecting the retail sector, including the price-conscious consumer, waning consumer confidence, the increased influence of social media, rising commodity costs and consumer access to credit.”
Three-quarters of retailers believe the crisis will extend into 2012, and beyond. A return to growth in the financial markets will take longer, they believe, with 58 percent of retail executives saying they don’t see growth returning until 2013.
Nearly 60 percent of retail executives believe sales will grow in the next year, but that optimism is tempered from last year when nearly 90 percent expected some level of growth.
However, with the all-important holiday season coming up, three-quarters of executives see sales improving slightly or staying the same as last year. In addition, 37 percent predict consumers will wait to the last minute to buy, hoping for bargains. On that note, nearly half of the executives surveyed believe that broad discounting and the price of gas will be driving factors in consumers’ decision to spend.