CIT: Mid-Market Housewares Execs Predict Stronger Sales in ’14
Despite ongoing challenges facing the retail sector and the economy, more than 70% of middle-market housewares executives are forecasting stronger sales performance in 2014, according to a recent survey by CIT. While the outlook is positive, 50% indicate that the current economic conditions are placing a strain on their financial performance, while 79% say their performance is closely linked to the U.S. economy.
Despite these challenges, more than a third (38%) see increased demand for upscale, premium products. And a similar number (34%) say that they are pursuing sales with customers who desire upscale, ergonomic, leading-edge technology and “high design” products. There is movement in more modestly priced housewares products, too; 30% of manufacturers say that they are aggressively pursuing this market.
“There are plenty of economic indicators available to forecast how well the economy is improving, but one of the best barometers may be whether consumers are purchasing new appliances and housewares items,” said Jon Lucas, president of CIT Trade Finance. “Manufacturers are telling us that they are seeing an uptick in demand, particularly in upscale items, and that’s a very good indicator that the economy is improving.”
The survey also revealed that one in four executives (27%) say that they
are taking significant steps to shift offshore manufacturing back to the United States in an effort to help reduce shipping time (16%), improve quality (14%) and promote sales by being able to label products “Made in America.” In addition, 50% of housewares makers say that they are aggressively pursuing sustainability initiatives in their product lines.
Across the industry, customers, suppliers, retailers and housewares manufacturers are all seeking commercial concessions, which are sometimes at odds with each other. For example, nearly half of the executives surveyed note that customers are demanding longer payment terms, while 45% said that their suppliers are demanding shorter payment terms.
• 43% of housewares manufacturers say that obtaining better payment terms from suppliers is critical.
• 45% report that overall weakness in the retailing sector is harming their performance.
• 63% report that while economic conditions play a significant role in their success, the quality and appeal of their products and services drives the most value in their business.
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