NEW YORK ― Chief marketing officers at U.S. retailers are cautious heading into the holiday season, though those at larger chains are a bit more optimistic about their prospects, according to a survey conducted by BDO USA.
Chief marketing officers expect holiday sales to rise 2.9 percent this year, a less rosy view than the 3.5 percent rise a group of CMOs predicted during the firm’s 2010 survey.
“It kind of confirmed my belief that the holiday sales were going to be tepid – positive, but not very strong,” said Doug Hart, partner in BDO’s retail and consumer product practice.
Most retailers have kept their holiday season inventory purchases about the same as last year, as they attempt to anticipate how a high unemployment rate and other economic issues will affect spending.
Retailers do not want a repeat of the 2008 holiday season, when shoppers cut back and chains that ordered too many goods had to slash prices, hitting margins, to sell them.
Sixty-five percent said their chain’s inventory purchases have stayed about the same, up from 52 percent last year.
Inventory decisions were likely impacted by the weak consumer confidence numbers over the summer, which is when most chains have to make their final calls on holiday purchases to ensure they have time for goods to arrive from overseas.
Inventory levels are expected to be up by just 0.7 percent this holiday season, down from the 2.8 percent increase that was projected in 2010.
“They’re a little bit more cautious,” said Hart, noting that CMOs often have a brighter view than executives such as chief financial officers. “The fact that these guys are certainly not optimistic is a good benchmark for where the inventory purchases are going.”
Overall, 48 percent of those surveyed anticipate their holiday season sales will stay about the same, 41 percent expect their sales to rise and 11 percent see a decline.
Among CMOs from some of the biggest retailers, just 33 percent see their sales staying about the same, while 67 percent are calling for sales at their chains to rise. No CMOs from the large chains expect their sales to fall.