According to a recent study by BDO USA, LLP, 82% of chief financial officers at leading U.S. retailers anticipate a continuation of stagnant economic conditions as opposed to a double dip (9%) or an ongoing turnaround (9%).
The majority (76%) said unemployment is the economic issue having the greatest impact on consumer confidence for the balance of 2010 (a jump from 64% in 2009). In contrast, less than one quarter cited either a rebound in the housing market (10%) or continued rebound in the U.S. and global financial markets (9%) as crucial to an economic turnaround. The impact of personal credit availability and debt levels (14%), the weak housing market (4%) and market volatility (4%) are also playing a role.
These findings came from the most recent edition of the BDO USA, LLP Retail Compass Survey of CFOs, which examined the opinions of 100 chief financial officers at leading retailers located throughout the country. The retailers in the study were among the largest in the country, with revenues ranging from $100 million to $100 billion. The survey was conducted in August and September of 2010.
Despite their outlook, almost all CFOs (94%) anticipate that merger and acquisition activity in the retail sector will increase or stay about the same during the next year or so as low interest rates and a favorable corporate debt climate remain. Seventy-six percent expect retail M&A to take place in the United States market as opposed to Asia-Pacific (17%) or Europe markets (7%).
Seven in ten of the surveyed CFOs said they are involved in green practices. Seventy percent are taking steps to reduce their carbon footprints, including recycling (70%), using less paper (64%), and reducing electricity in stores (43%), offices/other facilities (38%) and distribution centers (26%).