Retail CFOs Forecast 5% Sales Growth for 2014

Consumer confidence is expected to rise, according to the latest BDO survey.

February 14, 2014

CHICAGO – Despite ongoing market uncertainty, retail chief financial officers are feeling more confident about the state of the consumer. According to a new BDO USA, LLP, survey, retail CFOs forecast a 5.1% increase in total sales and a 4.8% increase in comparable store sales this year, marking a significant increase from the number expressing similar sentiments last year. A majority of CFOs (63%) indicate that they include online sales in their comparable sales projections, suggesting that some of this expected growth and optimism may be linked to the exploding popularity of e-commerce.

“With consumer confidence gaining momentum, retail CFOs are relatively bullish about 2014 retail sales,” said Doug Hart, partner in the retail and consumer products practice at BDO, in a press release. “While concerns remain about unemployment and financial market volatility due to the Fed's pullback, they appear to be offset by the housing market recovery and less concern over Washington gridlock. Retailers are hoping that those factors will help boost consumer confidence in the coming year.”

Underlying these projections, a majority of retailers (56%) say that they expect consumer confidence will increase in 2014. Though plunging briefly in fall 2013 as a result of the government shutdown, confidence levels have recovered to 80.7, their highest point since August 2013, according to the Conference Board.

However, CFOs remain wary of impediments to confidence, particularly a weak jobs outlook. Job creation across sectors continues to be sluggish; as a result, a plurality (39%) of retail CFOs cite unemployment as the top factor influencing consumer confidence in 2014. Personal credit availability and debt levels (18%) also continue to place pressure on consumers, and are collectively the second most-frequently cited factor by CFOs. These numbers remain consistent with last year’s survey.

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