The outlook for the retail industry is bright, according to a new study released today from KPMG. The majority of retail executives believe 2010 will be a better year in terms of profitability and job placement.
Seventy percent of industry executives expect business to improve next year with about two-thirds predicting stronger revenue (68 percent) and greater profitability (66 percent).
Executives said they expect the retail job market to improve (84 percent) with 32 percent believing conditions will be better than 2009. More than half (52 percent) of executives polled said they are confident that stability is on the way. Only 14 percent of respondents reported possible further headcount reductions.
"The KPMG survey findings reflected an expression of guarded optimism among retail executives, given the industry's challenges as demand for goods continued to plummet during the recession," said Mark Larson, KPMG global retail sector chair, in a statement. "Their optimism is in sharp contrast even with the latest report from the Commerce Department, which revealed last week that retail sales dropped in July, despite evidence that the economy has stopped contracting and that economists were forecasting a gain in sales."
Sixty-nine percent reported that their business was in position to advance with economic uptick. Nearly half (49 percent) of respondents said the retail sector would recover ahead of other markets.
Retailers will focus primarily on growth investment strategies (54 percent) going forward, but almost half (46 percent) will still be looking to cut costs. The top challenges for these businesses: restoring consumer confidence levels (55 percent), securing new revenue sources (51 percent), cost management (48 percent) and changes in consumer demand (46 percent).