Retailers remain pessimistic

21 July 2009

NEW YORK: Nearly 75% of the world's 100 biggest retailers predict the current financial crisis will continue to exert a negative influence on their business over the next two years, AlixPartners, the consultancy, has found.

Based on a survey conducted by the World Retail Congress and its own in-depth interviews, the company reported that the majority of retailers expect business conditions to remain challenging for the foreseeable future.

The main strategies being adopted by these companies to counteract this trend include closing shops and storage facilities, as well as reducing headcounts and delisting surplus products.

However, AlixPartners also stated that three-quarters of its sample group were not in regular contact with their suppliers' credit insurers.

Sanjay Bailur, a director of the business advisory firm, said the study thus "shows that retailers across Europe, and elsewhere, are not communicating regularly enough with credit insurers."

"This lack of communication, coupled with a lax approach to cash management can quickly result in companies facing serious liquidity issues," he added.

Data sourced from Reuters; additional content by WARC staff