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The American Consumer is Back; Don’t Count The Retail Sector Out!

Positive Fall Outlook According to Retail Suppliers
New York-U.S.-based importers and suppliers who sell goods to retailers – including small- and medium-sized chains, boutiques and the off-price discounters – are seeing growth in sales for both the summer and fall shopping seasons, despite a slow start to 2016 in consumer spending, according to a new survey conducted by Capital Business Credit (CBC), a supply chain finance company.

Fall 2016 Season
According to the CBC Global Retail Manufacturers and Importers Survey, the majority of those surveyed (81 percent) believe that this year’s fall season will be stronger than or the same as 2015 – 39 percent believe it will be stronger than last year’s and 42 percent believe it will remain the same.

Historically, retailers have seen shoppers buy winter clothes as early as August, when new coats hit the racks. While there is significant optimism amongst retailers for a strong fall sales season, there is limited belief that consumers will be shopping early for winter. Only 19 percent of the respondents indicated that the fall season would start earlier and a quarter of the respondents said it would start later than the previous years.

“Given the economic rollercoaster ride that has been the first half of 2016, we were pleased to see such optimism from wholesalers that sell to the country’s major retailers,” said Andrew Tananbaum, executive chairman, Capital Business Credit.

Summer 2016 Season
While winter of 2015/16 was a disappointment to retailers – largely due to very mild temperatures – summer 2016 has been a significant success. Nearly four in 10 importers report a material increase in orders from retailers, with nearly 60 percent of them reporting a spike of 10 percent or more.

“From everything our customers are reporting it seems like the consumer is back. Spending is up and retailers are optimistic about the second half of 2016,” Tananbaum continued. “In fact, three quarters (75 percent) of importers and suppliers are experiencing merchandise reorders for the summer shopping season. This paints a positive picture for the upcoming months for the overall retail sector, as well as the economy.”

When it comes to order lead time, the time between an order from a retailer is placed and when it’s expected to ship, more than half (59 percent) said timing has not changed. On the other hand, 41 percent indicated order lead times have become shorter and of those, 31 percent of these retailers are buying more on speculation.

However, respondents indicated that concessions are a matter of concern for them in 2016. When asked if retailers are asking for more concessions, 50 percent of those surveyed indicated that retailers are asking for more than they did in 2015. Additionally, 67 percent of these respondents said that it will negatively impact profit margins.

Methodology
CBC surveyed approximately 50 retail importers and manufacturers that supply close to $900 million in goods at retail outlets throughout the United States. These wholesalers sell to all segments of the retail supply chain with the exception of the juniors market.

 

About Capital Business Credit

Established in 1988, Capital Business Credit LLC is a global financial products and services company. The Company’s solutions include: full-service factoring; accounts receivable management services; inventory lending; asset-based lending; and international financing. CBC Trade Finance, a division of CBC, provides trade finance solutions for U.S.-based importers working with Asia-based suppliers (exporters). Capital Business Credit is based in New York, with offices in Hong Kong; Shanghai, Los Angeles; Charlotte, NC; and Ft. Lauderdale, Fla.

Capital Business Credit is now known as White Oak Commercial Finance.

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