Mood Survey — Deloitte & Touche LLP retail holiday outlook; Scrooge who? Rising optimism indicates Chicago and Milwaukee retailers are dreaming of a green Christmas

Business Wire, Nov 14, 1994

CHICAGO--(BUSINESS WIRE)--Nov. 14, 1994--Area retailers are the most optimistic in several years about the upcoming holiday season with more than 91 percent anticipating same or increased spending compared to last year.

In a dramatic contrast from last year, nearly 45 percent of retailers, compared to 8 percent in 1993, anticipate holiday shoppers to spend more on gifts, according to the Deloitte & Touche LLP annual "Moody Survey: The Retailer's View."

"Retailers seem more confident than ever about consumer spending and are planning to take a more aggressive approach this year to win their share of holiday expenditures," said Jerry Cohen, Deloitte & Touche partner and director of the Midwest TRADE/Retail & Distribution Services Group.

With the majority of respondents believing sales and profits will increase up to 6 percent or higher over the prior year, retailers are planning a myriad of strategies to improve their holiday bottom line. As in earlier years, controlling inventory levels and corporate expenses are a top tactic, but this year more retailers are planning to increase advertising as a percentage of sales.

One in five Chicago and Milwaukee merchants say they plan to increase their advertising. Among those increasing advertising budgets, retailers will spend more dollars in direct mail/catalog and newspaper mediums for holiday promotion.

Customer service, price promotions, exclusives and quality merchandise still top the list of reasons retailers believe shoppers visit their stores. Signaling that retailers are trying to better meet the needs of their

customers, larger selection and everyday low prices are the only attractions rising in popularity by retailers -- up to 13 percent this year from 9 percent in 1993.

Cohen stated, "Consumers have become accustomed to the superstore format and are demanding more options and consistently lower prices. Our survey shows that retailers are getting better at providing what the customer wants, and retailers still want to offer personal services that fuel their reputations."

The most widely used, in-store event locally during the holiday season continues to be complementary gift wrapping (25 percent), while gift-with-purchase programs have jumped from 12 percent last year to 19 percent this year.

Projections about the economy are also up with as many as 60 percent of retailers expecting a modest improvement compared to 38 percent the prior year. Two-thirds of respondents agree that health care reform, the current crime rate and immigration issues will adversely impact U.S. business although 60 percent of retailers believe that their ability to effectively serve the customer will have the single greatest impact on their business.

Last year, 53 percent of respondents expected NAFTA to have a positive long-term effect on their business. While only 3 percent of retailers surveyed have international operations, 5 percent plan to expand overseas. Of those polled with international operations, 75 percent have Latin American influence with Mexico among the most popular expansion location targets.

This annual assessment of the retail marketplace sponsored by Deloitte & Touche was based on responses from more than 1,000 surveys sent to retailing executives in the greater Chicago and Milwaukee areas. The survey solicited retail executives' forecasts for the economy, the upcoming holiday shopping season and business strategies for 1995, among others.

Deloitte & Touche LLP is a full-service accounting, tax and management consulting firm. As a member of the Deloitte & Touche TRADE network, the Midwest Group is part of the accounting profession's largest practice committed exclusively to serving the needs of retailers and related industries.

-0-

NOTE TO EDITORS: Contact Kathy MacArthur at 312/946-2088 for a copy of the survey results and graphs. Disk copies of the charts and graphs are available on Macintosh Quark and Freehand formats.

CONTACT: Deloitte & Touche LLP, Chicago

Kathleen A. MacArthur, 312/946-2088