Survey: Consumer spending to trail financial markets recovery

New York City Faced with one of the most challenging years on record, retailers and those who supply them believe that consumer spending will lag the turnaround of the U.S. financial markets, according to a new study released Monday by CIT Group, a leading provider of financing to small businesses and middle-market companies.

In the report, “U.S. Small and Middle Market Outlook 2009: Retailers and Suppliers Take Stock of Economic Downturn,” 47% of retail respondents believe the financial markets will turn around next year. Separately, 45% believe that consumer spending will not return to 2007 levels until 2011 or 2012.

The continuing softness in the retail market has caused many retailers to reevaluate and adjust their business models, the study found. They are taking a more conservative and cautious approach to the upcoming holiday season by controlling their inventories, and are planning more aggressive discounts earlier in the season.

Other key findings among retail respondents include:

• 67% will stock less inventory than in 2008;
• 69% will expand online and direct selling;
• 56% will advertise more aggressively;
• 66% will offer greater discounts; and
• 68% will hold clearance and other sales prior to New Year’s Day.