CLICK HERE. / " title="THE MAJORITY OF U.S. RETAILERS AND SUPPLIERS believe that consumer spending may return to the 2007 levels by the end of 2011. For a larger version of this image, CLICK HERE. /"/>NEW YORK – U.S. retailers and suppliers are an optimistic group, according to the second annual retail outlook study released by CIT Group Tuesday, which revealed 65 percent of retailers and 69 percent of suppliers believe consumer spending may return to 2007 levels by the end of 2011.
“While the majority of retailers are cautiously optimistic about their future, more than two-thirds expect revenues to grow over the next 12 months,” said Burt Feinberg, managing director and industry group head of retail finance at CIT. “The general consensus is that, having weathered the economic downturn, most retailers are in better shape today than in 2009 and have positioned themselves well to meet future consumer demand when it returns.”
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The CIT Group revealed that the industry is “undergoing a transformation” in this year’s study, “U.S. Small Business and Middle Market Outlook 2010: Retailers and their Suppliers—Smarter. Leaner. Cautiously Optimistic.”
Learning from recent economic woes, retailers and suppliers are operating more efficiently and taking a conservative approach towards inventory, staff levels, and cash conservation, said CIT.
“Some valuable lessons have been learned from the economic crisis and many suppliers believe they are better positioned for strong and sustained growth once the economy turns,” said Jon Lucas, executive vice president and chief sales officer of trade finance at CIT. “This study reveals an industry that is transforming, top to bottom.”
Almost 60 percent of retailers have an increased inventory compared to last year but are also taking advantage of tracking technology to speed turnover. Additionally, a large chunk of retailers’ capital spending will go to in-store technological improvements and mobile applications.
The fast-approaching holiday season means hiring additional workers for 68 percent of retailers while 72 percent expect to discount more this year than last. Overall, retailers and suppliers have a positive outlook for the season.
The majority of retailers, 68 percent, expect their revenues to grow during the next 12 months but sales expectations may still be below the levels seen prior to the economic downturn.
Also on a positive note, 67 percent of suppliers said that their ability to secure financing has improved over the past year and 40 percent of suppliers and manufacturers expect their financing needs to grow, or grow significantly (23 percent), over the next 12 months.
CIT surveyed 100 retailers with revenues of $25 million to $1 billion for the report. The survey took place in July and August.
