Confidence dips in retail sector, with one in four bosses less confident than start of the year
More than a quarter of senior executives in the retail sector are less confident now than at the beginning of the year, according to a new international study of economic recovery.
The research, conducted by international law firm Eversheds, shows that the retail sector is in more downbeat mood than other areas of the economy, but many businesses have taken a proactive approach to combating the challenging economic climate. The research reveals that retailers have been most focused on increased customer relationship management (CRM) activity to aid recovery over the last 18 months.
Eversheds’ Tools for Recovery report, which captures the views of more than 1000 senior business figures across China, the USA, Europe and the United Arab Emirates (UAE), also found that retailers are planning to invest in some key areas over the next 12 months – increased marketing spend (33%) and increased spend on technology (29%).
This follows some tough decisions during the last 18 months, with 50% cutting discretionary spending and 33% freezing or cutting pay.
Antony Gold, partnerand head of retail sector group at Eversheds, said:
“While economists have signalled the official ending of the recession, there is little doubt that challenging economic conditions persist. Despite this backdrop, many companies in the retail sector have survived and some have even thrived. The question is how? Through this research, we wanted to identify the steps that retailers across the globe have taken to stay ahead and the plans they have in place to recover and grow.
“The findings show that businesses in the retail sector are less confident today than they were at the beginning of the year, but that they are taking positive steps to tackle the challenging economic climate. Across the globe, there are encouraging signs of a general trend towards reducing cost-cutting measures in the year ahead and a greater desire to invest and focus on growth.”
Across all sectors, the report found that one in four senior executives is less confident now than at the beginning of the year, the mood varies greatly from country to country. Pessimism is most pronounced in the USA, where confidence levels have dropped since the beginning of the year, while optimism in the East continues to soar.
Businesses in the USA have taken the least proactive approach to combating the challenging economic climate, while businesses in China and Russia have led the charge in trying to drive demand, by searching for new market opportunities. China is also leading the way in international expansion, with almost three quarters of those surveyed looking to expand into an average of more than two foreign markets in the next 12 months, while just 18% of companies in the USA are seeking out international opportunities.
