CIT Group: Economy Challenging Housewares, Brighter Days Ahead

Despite ongoing challenges facing the retail sector and the economy, more than 70% of middle market housewares executives are forecasting stronger sales performance in 2014, according to a recent survey by CIT Group Inc. and Forbes Insights. While the outlook is positive, 50% indicate that the current economic conditions are placing a strain on financial performance, while 79% say their performance is closely linked to the U.S. economy.

Despite these challenges, more than a third (38%) see increased demand for upscale, premium products. And a similar number (34%) say that they are pursuing sales with customers who desire upscale, ergonomic, leading-edge technology and “high design” products. There is movement in more modestly priced housewares products, too; 30% of manufacturers say that they are aggressively pursuing this market.

“Manufacturers are telling us that they are seeing an uptick in demand [for housewares items], particularly in upscale items, and that’s a very good indicator that the economy is rebounding,” Jon Lucas, president of CIT Trade Finance, said.

The survey also revealed that:

  • One in four executives (27%) say that they are taking significant steps to shift offshore manufacturing back to the United States in an effort to help reduce shipping time (16%), improve quality (14%) and promote sales by being able to label products “Made in America.”
  • 50% of housewares makers say that they are aggressively pursuing sustainability initiatives in their product lines.
  • Executives surveyed note that customers are demanding longer payment terms, while 45% said that their suppliers are demanding shorter payment terms.
  • 45% of housewares manufacturers surveyed report that overall weakness in the retailing sector is harming their performance.
  • 63% of housewares manufacturers polled report that while economic conditions play a significant role in their business, the quality of their products and services drives the most value in their business.