U.S.-based importers and suppliers that sell goods to retailers – including small- and medium-sized chains, boutiques and 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.
According to the CBC Global Retail Manufacturers and Importers Survey, the majority of those surveyed (81%) believe that this year’s fall season will be stronger than or the same as 2015 – 39% believe it will be stronger than last year’s and 42% 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 among retailers for a strong fall sales season, there is limited belief that consumers will be shopping early for winter. Only 19% of 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 of Capital Business Credit.
While the winter of 2015-2016 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% of them reporting a spike of 10% 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 said. “In fact, three quarters (75%) 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, which is the time between an order from a retailer is placed and when it’s expected to ship, more than half (59%) said timing has not changed. On the other hand, 41% indicated order lead times have become shorter and of those, 31% 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% of those surveyed indicated that retailers are asking for more than they did in 2015. Additionally, 67% of these respondents said that it will negatively impact profit margins.
CBC surveyed approximately 50 retail importers and manufacturers that supply close to $900 million in goods at retail outlets throughout the U.S. These wholesalers sell to all segments of the retail supply chain with the exception of the juniors market.