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Retailer Outlook Improves Slightly

supermarketnews.com DATAPOINTS September 24, 2012 RETAILER OUTLOOK IMPROVES SLIGHTLY CHICAGO – Retailers appear to be becoming a bit more optimistic about sales and consumer spending although overall they remain cautious, a recent survey shows. Following a better- than-expected back-to-school season, retail chief financial officers surveyed by BDO USA here are projecting a 4.5% increase in total 2012 sales and a 3.6% gain in second-half comparable-store sales. While 57% of respondents in the BDO Retail Compass Survey of CFOS expect to see a continuation of stagnant economic conditions in the near future, the number of ČFOS forecasting an ongoing economic turnaround nearly tripled this year (32%, up from 11% in 2011). Retailers are encouraged, said Doug Hart, partner in the retail and consumer product practice at BĎO USA, but “forecasts are cautious as retailers closely watch unemployment, election results and inventory levels – any of which could throw a wrench in holiday results.' SOURCE: BDO Retail Compass Survey of CFOS Foreign exchange Inventory Inflation Concerns levels/ 7% markdowns 48% Store 17% operating/ admin, costs .7% What will be the Cost of biggest threat to your margins in the balance of 2012? products How have your inventory levels changed for the 2012 holiday season Logistics/ 40% transportation 18% Expect comparable- relative to 2011? Maintained 55% store sales to be Stocking Stuffers In-Stock Increased 26% higher in 2012 In 2012, which is the greater risk to your holiday sales? Too much inventory: 58% Insufficient inventory: 42% Decreased 19% than in 2011. 3.6% PESSIMISM DECLINES What retailers anticipate in the near term. 2012 2011 2010 Continuation of stagnant economic conditions 57% 77% 82% An ongoing economic turnaround 11% Projected gain in comparable-store sales for second half of 2012. 32% 9% A double dip in the economy 11% 12% 9% "Consumers proved resilient through back-to-school season, and that is fueling greater optimism for holiday sales results." - DOUG HART, partner, retail and consumer product practice, BDO USA Confidence Killers SALES OUTLOOK IMPROVES Which factor will have the biggest impact on HIGHER ABOUT THE SAME LOWER consumer confidence for the balance of 2012? Expectations for TOTAL sales in 2nd half of 2012 vs. a year ago. Expectations for COMP sales in 2nd half of 2012 vs. a year ago. 9% 10% Unemployment 18% 22% 16% 18% Fuel 41% 36% prices 31% 42% 33% 38% 2% 33% Presidential Weak 6% election housing- market 51% 7% Financial 29% 55% 51% 48% 44% 44% market Personal credit availability and debt levels volatility 15% 2012 2011 2010 2012 2011 2010 supermarketnews.com DATAPOINTS September 24, 2012 RETAILER OUTLOOK IMPROVES SLIGHTLY CHICAGO – Retailers appear to be becoming a bit more optimistic about sales and consumer spending although overall they remain cautious, a recent survey shows. Following a better- than-expected back-to-school season, retail chief financial officers surveyed by BDO USA here are projecting a 4.5% increase in total 2012 sales and a 3.6% gain in second-half comparable-store sales. While 57% of respondents in the BDO Retail Compass Survey of CFOS expect to see a continuation of stagnant economic conditions in the near future, the number of ČFOS forecasting an ongoing economic turnaround nearly tripled this year (32%, up from 11% in 2011). Retailers are encouraged, said Doug Hart, partner in the retail and consumer product practice at BĎO USA, but “forecasts are cautious as retailers closely watch unemployment, election results and inventory levels – any of which could throw a wrench in holiday results.' SOURCE: BDO Retail Compass Survey of CFOS Foreign exchange Inventory Inflation Concerns levels/ 7% markdowns 48% Store 17% operating/ admin, costs .7% What will be the Cost of biggest threat to your margins in the balance of 2012? products How have your inventory levels changed for the 2012 holiday season Logistics/ 40% transportation 18% Expect comparable- relative to 2011? Maintained 55% store sales to be Stocking Stuffers In-Stock Increased 26% higher in 2012 In 2012, which is the greater risk to your holiday sales? Too much inventory: 58% Insufficient inventory: 42% Decreased 19% than in 2011. 3.6% PESSIMISM DECLINES What retailers anticipate in the near term. 2012 2011 2010 Continuation of stagnant economic conditions 57% 77% 82% An ongoing economic turnaround 11% Projected gain in comparable-store sales for second half of 2012. 32% 9% A double dip in the economy 11% 12% 9% "Consumers proved resilient through back-to-school season, and that is fueling greater optimism for holiday sales results." - DOUG HART, partner, retail and consumer product practice, BDO USA Confidence Killers SALES OUTLOOK IMPROVES Which factor will have the biggest impact on HIGHER ABOUT THE SAME LOWER consumer confidence for the balance of 2012? Expectations for TOTAL sales in 2nd half of 2012 vs. a year ago. Expectations for COMP sales in 2nd half of 2012 vs. a year ago. 9% 10% Unemployment 18% 22% 16% 18% Fuel 41% 36% prices 31% 42% 33% 38% 2% 33% Presidential Weak 6% election housing- market 51% 7% Financial 29% 55% 51% 48% 44% 44% market Personal credit availability and debt levels volatility 15% 2012 2011 2010 2012 2011 2010

Retailer Outlook Improves Slightly

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Retailers appear to be becoming a bit more optimistic about sales and consumer spending although overall they remain cautious, a recent survey shows...

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