A new retail outlook survey from CIT Group, conducted by Forbes Insights, finds that while 45% of middle market retail executives believe an economic recovery is already here or is well underway, 55% don’t expect a recovery to materialize until later, with almost 25% saying they don’t expect to see a recovery until 2015.
Looking toward this holiday season, one in three retailers expect minimal growth rates of between one and five percent, while 12% say they expect to see a decrease in sales over the holidays. An outlier to this sentiment: one in four retailers expect to see growth between six and 10% this holiday season.
“For many middle market retail executives, the forecast for the coming holiday season and beyond is a wintry mix,” said Burt Feinberg, President, CIT Corporate Finance, Commercial & Industrial. “More than 60 percent say that high unemployment will continue to hurt sales, and 53 percent say overall economic uncertainty is having a dampening effect. Despite this, high-end luxury goods continue to sell well, while other consumers are choosing to trade down on their purchases.”
While 70% report that their own financial condition is healthy, 25% say they are reducing the schedules of existing employees to 30 hours or less, and 27% report that online and mobile business models are disrupting their business, according to CIT.
In addition, 61% say they see an uneven recovery developing that seems to be favoring wealthier consumers more than middle- and lower-income customers. In fact, while 50% of retailers say they are seeing increased demand for luxury goods among affluent shoppers, 45% say they are seeing middle class shoppers shift their preference from premium to lower-priced products, according to CIT.
Complimentary copies of the full report can be downloaded at cit.com/retailoutlook.