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Survey: U.S. expansion is key growth strategy for retailers in 2013


Chicago -- Despite all the headlines about Canadian and global growth, U.S. expansion remains a key growth strategy for retailers, according to a survey of 100 retail chief financial officers by BDO USA.

In the seventh-annual BDO Retail Compass Survey of CFOs, 30% of the executives said U.S. expansion will be their priority growth tactic in 2013, followed by improving merchandise assortment (24%) and e-commerce and mobile commerce (22%).

“The retail storefront isn’t going anywhere just yet,” said Ted Vaughan, partner in the retail and consumer products practice at BDO USA, a professional services firm providing assurance, tax, financial advisory and consulting services. “The opportunities abroad and online are clear, but retail executives still believe that U.S. stores are a core part of the business. In addition to investing in existing stores, we’re also seeing several online brands introduce storefronts for the first time as they look to appeal to shoppers who want to see and try on merchandise in person.”

Many retailers also will be looking to add staff in stores and their corporate offices. Over one-third of CFOs (34%) said the number of employees at their company will increase this year.

Other major findings of the survey include:

Executive compensation may rise, but performance metrics are important. Attracting and retaining strong leaders is paramount to success as retailers reshape strategy and launch growth initiatives. As a result, 30% of CFOs expect their management’s compensation to increase this year, and only 5% forecast a decrease, despite continued scrutiny around pay packages. Still, a majority of retailers (66%) said their company’s leaders have an incentive plan to tie pay to performance, and 71% reported that a profitability-based metric is the primary measure.

Regulation and industry competition rank among top risks. A majority of CFOs (34%) cited federal, state and local regulations as the top risk to their business in the next year.

In addition, 32% of CFOs said competition and consolidation is their most concerning risk as they look to differentiate offerings and attract consumers in a crowded marketplace. Retailers also pointed to U.S. and foreign supplier and vendor issues (16%), data breaches (12%) and geopolitical events and natural disasters (6%) as top risks in the year ahead.

• Retailers’ investments are proof of omni-channel push. When asked where they plan to invest the most capital this year, 32% of the CFOs said overall advertising and promotions will be their biggest investment. Twenty-nine percent of CFOs said they will invest the most capital in their e-commerce channel, and 26% said redesigning/remodeling stores will be their top investment.

The BDO Retail Compass Survey of CFOs examined the opinions of 100 CFOs at leading retailers throughout the country. The survey was conducted in January and February of 2013.

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