Report: Retail Manufacturers Provide Mixed Signals
November 23, 2016
While retail sales are expected to increase this holiday shopping season compared to last year, U.S.-based importers and suppliers who sell goods to retailers are not entirely confident consumers are going to open their wallets, according to a new survey conducted by Capital Business Credit (CBC), a supply chain finance company.
According to the CBC Global Retail Manufacturers and Importers Survey, responses were divided when asked how holiday sales will perform this year compared to last year – 32% believe sales will be stronger, while 29% believe sales will be weaker. Thirty-nine percent believe they will be the same.
“Even though consumer spending has increased over the course of the year, manufacturers and wholesalers that work with major retailers are providing mixed signals regarding how this holiday shopping season will perform,” said Andrew Tananbaum, executive chairman, CBC. “In fact, only 27% reported an increase in orders from retailers this year for the holiday season, while 21% reported a decrease.”
With consumers programmed to wait for discounts, respondents were split down the middle when asked if retailers will heavily rely on discounting to move merchandise this holiday, with 56% stating yes and 44% indicating they will not. Of those that stated retailers will rely on discounting, 85% believe discounting will affect margins.
One thing that respondents did agree on is anticipated online sales increases:
• 36% believe online sales will increase 1% to 3%
• About a quarter (24%) believe online sales will increase 4% to 5%
• A third (33%) believe online sales will increase 6% to 10%
CBC surveyed approximately 40 retail importers and manufacturers that supply close to $670 million in goods at retail outlets throughout the U.S. These wholesalers sell to all segments of the retail supply chain with the exception of the juniors market.