As many retailers report earnings this week, analysts will be looking for guidance around what’s behind the slower-than-expected start to the year in retail sales. Despite lower gas prices, stronger consumer confidence and a host of positively trending economic indicators, consumer spending has been fairly steady. In this backdrop, retailers are increasingly unsure about how to strategically invest for growth in the new U.S. retail marketplace. Continue reading
Since the start of the New Year, a curious situation has been baffling retailers. After hitting pre-recession levels in January, consumer confidence wavered between February and April, but maintained a healthy 95.2 on the Conference Board Index last month, well above its 2014 mark. So far, however, this cheerier consumer sentiment has hardly translated into more robust sales. Continue reading
The biggest line item on retailers’ budgets may be getting bigger. As unemployment rates decline and external pressures shift workforce dynamics, simply meeting minimum wage requirements for entry-level salaries may no longer be enough. With Wal-Mart announcing plans to boost pay for U.S. employees well above minimum wage, and other category killers like TJ Maxx and Target following suit, it’s clear that this is not a passing fad. Continue reading
Real estate is top of mind for many retailers in 2015. While some brands are rethinking store formats and rightsizing the number of stores, others are expanding rapidly or exploring a brick-and-mortar presence for the first time.
As retailers consider real estate decisions and potential investments, in addition to looking closely at locations and consumer trends, retailers should be thinking ahead to how they might account for depreciation. A recent district court case in Louisiana (Stine, LLC v. USA) may provide some guidance. The case addressed whether a building can be considered “placed in service” before it is even open for business. Retailers should pay attention to this case, as depreciation can be considerably impacted by the placed in service date. Continue reading
In January of this year, we conducted our ninth annual Retail Compass Survey of CFOs, which asked 100 retail CFOs at leading U.S. retailers about their outlook for the industry in the year ahead. We found that along with optimistic sales projections, retailers provided their most bullish forecast for M&A activity in the survey’s history and expect strategic buyers to be the most acquisitive. Retailers also project modest e-commerce sales growth, and remain focused on fueling that growth by bolstering their online offerings and security with investments in their digital channels and IT systems.
For additional insights into financial metrics, sourcing strategies and top regulatory and tax concerns, be sure to check out the full report.
To access the survey report online, click here.
As with the rest of the U.S. retail sector, the current environment for retail pharmacies is marked by competition, consolidation and challenges to maintain margins. In the midst of an evolving healthcare landscape wrought with the pressures of an aging population and transformative new regulations, the pharmacy space is often dominated by news of the “Big Three”—CVS, Walgreens Boots Alliance and Rite Aid—as well as a handful of other significant big box players like Wal-Mart and Target, which have been increasingly pursuing opportunities to expand their in-store clinics. Continue reading
Earlier this week, a series of hearings in the National Labor Relations Board case against McDonald’s Corp began, ushering in what is likely to be a long process of ruling whether the company is to be considered a “joint employer”, and therefore, potentially liable for franchisees’ employment practices.
While the ruling is still up in the air, the case and its outcomes could have significant implications in the franchising space, and both franchisees and franchisors should carefully consider the range of possible ramifications before pursuing large-scale investments, transactions or other business activities. To help shed light on these potential economic ramifications, BDO’s Dr. James Woods and Chris Johnson recently wrote an article in Franchising World that addresses the many uncertainties that those in the industry now face in the run-up to the ruling.
To read their full article, click here.
What are retail CFOs anticipating as they look to the year ahead? We’re preparing to release our 2015 Retail Compass Survey of CFOs report shortly, complete with a full analysis of the first, second and third round of results.
So far, 2015 has brought weaker-than expected sales gains for retailers. But longer-term growth indicators—including a stronger job market, promising consumer confidence levels and financial market stability—have retail CFOs feeling up about 2015 overall. Those we surveyed anticipate that further increases in consumer confidence levels will propel solid sales gains throughout the year ahead. Meanwhile, they expect the hyper-competitive landscape will prompt more retailers to consider M&A as a growth tactic in 2015.
Before we release the full report, take a look at our latest infographic below, which covers retailers’ sales projections, M&A expectations and considerations around key 2015 digital investments: Continue reading
Over the last few weeks, we’ve been sharing results from our 2015 BDO Retail Compass Survey of CFOs. Key themes have emerged around optimism, growth, M&A and the focus of our latest set of findings: investment. Continue reading
One size fits all? For some brands, that may not always be the case. Big box retailers who have historically relied on cost-conscious customers looking for one-stop shopping destinations are now searching for ways to boost their top line as the economy improves and consumer preferences shift away from large, all-in-one shopping trips. Continue reading