Importers who sell to America’s major retailers are preparing for a significant uptick in consumer spending this spring and summer according to a recent survey conducted by Capital Business Credit (CBC), a non-bank lender that services the retail sector.
According to the quarterly Global Retail Manufacturers and Importers Survey, 43.2 percent of respondents believe that the 2012 spring season will be stronger than 2011, and 40 percent believe that the 2012 summer season will surpass last year’s sales. Fears of a double dip seem to be declining, as an additional 40 percent of respondents believe that the spring and summer retail seasons will be at least as robust as last year’s.
“Retailers have played it very close to the vest for the past several years, fearful of overstocking the shelves,” said Andrew Tananbaum, executive chairman of CBC. “As consumers begin to open their pocketbooks again, importers and manufacturers are finally beginning to see increases in orders and re-orders. This is indicative that a stronger retail and economic recovery is underway.”
Forty percent of respondents indicated that retailers ordered more merchandise for the spring season as compared to last year. Twenty percent reported that orders stayed the same. An overwhelming 78.3 percent cited that they are receiving re-orders for spring merchandise—demonstrating stronger consumer demand than was initially anticipated.
Of those respondents who experienced an uptick in spring orders, 47 percent indicated that retailers ordered three to five percent more merchandise, and nearly a quarter (23.5 percent) indicated that customer orders increased by 10 percent or more.
Half of the respondents indicated that prices of consumer goods increased this spring season, while 35 percent believe they stayed the same.
While demand is increasing, margin pressures remain, with 62 percent of respondents citing that retailers are still relying on discounting to move product off the shelves.
“While increases in orders are important, retailers are still relying on heavy discounting to move merchandise which is affecting margins across the board,” Tananbaum continued. “Retailers are going to need to work hard to re-train consumers to rely less on discounts.”
Tananbaum concluded, “These numbers are very encouraging for the overall state of the consumer-driven economy. This is the first time in nearly three years that the importers we work with are manufacturing more than they did last year and are planning on having to restock shelves.”
Slightly more than one third (37 percent) of respondents indicated that they are seeing an increase in orders for the summer season, while another third (30.4 percent) are seeing orders stay the same. The overwhelming majority (81.8 percent) believe that the summer season will perform better than, or as well as, 2011.
While growth is expected for the summer, it is not at record breaking levels. Of those who believe that sales will be stronger, 45 percent believe it will be three to five percent stronger and 35 percent believe it will be stronger by three percent or less.
The Global Retail Manufacturers and Importers Survey, conducted by Capital Business Credit (CBC) (www.capitalbusinesscredit.com), polled more than 50 manufacturers and importers. The survey was conducted throughout the week of February 27, 2012. Respondents consisted of manufacturers and importers in the apparel, housewares, home furnishings, fashion accessories and furniture industries who manufacture some, if not all, of their products in China, India, Vietnam, Bangladesh, Pakistan and the United States.