Quick Stats

Quick Stats

    You are here

    Economic Crisis Prodding Retailers to Face New Marketplace Landscape: Report

    With the economy in tatters, retailers have to move quickly to address new marketplace realities, according to a new report from PricewaterhouseCoopers LLP (PwC) and Retail Forward. “Point of View: How Will This Recession Affect the Future of Retailing?” includes findings from Retail Forward’s monthly ShopperScape survey, Retail Forward’s retail sales forecasts and an analysis of how trends first outlined by PwC and Retail Forward in Retailing 2015: New Frontiers are panning out.

    With the economy in tatters, retailers have to move quickly to address new marketplace realities, according to a new report from PricewaterhouseCoopers LLP (PwC) and Retail Forward. “Point of View: How Will This Recession Affect the Future of Retailing?” includes findings from Retail Forward’s monthly ShopperScape survey, Retail Forward’s retail sales forecasts and an analysis of how trends first outlined by PwC and Retail Forward in Retailing 2015: New Frontiers are panning out.

    “The relative winners on the retail battlefield in recent months are already proving the relevance of the emerging retail trends that we identified in Retailing 2015," said John Maxwell, PricewaterhouseCoopers U.S. retail and consumer practice leader. "Packaging, store footprint and growth expectations will downsize going forward."

    “Point of View” found that retail sales growth would remain flat in 2009. The retail outlook is expected to improve by 2010, when sales growth across all retail sectors is expected to rally. However, growth will stay below the 5 percent inflation-adjusted pace averaged in the 10 years prior to 2008.

    “Retailers will need to recognize that future growth will come from tailoring existing stores to specific customer segments and local markets as opposed to adding stores,” observed Lisa Feigen Dugal, PwC U.S. retail and consumer advisory leader. “They need to adopt more creative strategies such as breaking the 80/20 rule with more limited editions and small runs to generate shopper excitement.”

    In assessing the near-term growth prospects, the report found that although the FDM channels will perform better than others, the sales growth rate for the combined channels is projected to slow to 2.4 percent in 2009, an almost 3 percentage-point decline from the annual average rate tracked during 2003–2008. Supercenters and warehouse clubs are expected to generate the strongest sales growth, while discount department stores and supermarkets will be the worst performers.

    According to the report, the housing market collapse will continue to slow sales growth in the combined homegoods channels, and nominal sales growth will slide by 3 percent in 2009. The hardest-hit and slowest-to-recover sector, sodftgoods, will rebound in 2010 but still trail supercenters, warehouse clubs, e-commerce and nonstore retailers, all of which vie for spending in softgoods categories.

    "Near-term shifts in shopping habits resulting from this economic crisis could significantly alter the consumer mindset in the long-term. This shift will give evolving retail trends greater momentum and retailers and suppliers will have to closely monitor and manage the complexities associated with these changes," noted Mary Brett Whitfield, SVP at Retail Forward.

    Download an electronic copy of “Point of View” at www.pwc.com/us/retail or www.retailforward.com.

    New York-based PwC provides industry-focused assurance, tax and advisory service. Retail Forward, headquartered in Columbus, Ohio, is a global management consulting and market research firm specializing in retail intelligence and strategies.

    Related Content

    Related Content