A new report concerning Canadian retailers indicates that businesses anticipate 2012 will be a year rife with challenges.
The poll, conducted by Ernst & Young, found that many retailers foresee the issues that they experienced last year will be among their top concerns this year, including dealing with more foreign competitors, a downturn in consumer buying power and poor consumer sentiment.
Daniel Baer, national retail industry leader, said the pace of Christmas sales was about on par with what the industry had in mind.
"National holiday sales to date increased approximately 2 per cent in 2011, in line with expectations," said Baer. "Consumers will continue to focus squarely on price in 2012. Retail sales are expected to rise marginally."
He added that higher gas prices, taxes, grocery costs and the price of manufactured goods may also cause consumer buying power to weaken, thus affecting retailers' profit margins.
As for holiday sales, Baer said the results of Black Friday and Cyber Monday - events that many Canadian retailers adopted to stimulate sales - were reflective of how much of an impact U.S. competitors have on the Canadian market. To keep sales strong, Baer predicted retailers will use social media in an even more aggressive manner than they have been.
The report indicated that online shopping had a sizable impact on retailers in 2011. With more consumers resorting to their mobile devices to buy things, Ernst & Young said retailers will attempt to further hone their internet marketing and sales efforts in 2012.
Baer also noted how retailers may be looking to expand their footprint in international markets as well, which could impact their operating costs and business insurance coverage.
"A number of Canadian retailers have been very successful in the US and in other countries around the world," said Baer. "These success stories will be examples to other Canadian retailers looking for a competitive advantage."
However, there will also be a number of companies consolidating their businesses practices, something several Canadian retailers experienced last year, as the down economy proved to be too much for them to handle. Recent data from Grant Thornton found business owners' confidence had fallen in Canada, but remained above levels from other countries.
Something that may have a considerable impact on businesses' bottom lines in 2012 is how they price their goods. And if the end of 2011 is any indication of how prices will fare this year, they could be on the way up.
According to Statistics Canada's Consumer Price Index, values rose 2.3 per cent in the 12 months to December, continuing a 2.9 per cent increase that took place in November. Prices of all the major components that detail the CPI rose, such as clothing and footwear, food, shelter and transportation.
Registering the biggest rise in costs was transportation, which jumped 3.3 per cent in the 12 months to December, easing somewhat when compared to November when prices jumped nearly 6 per cent. Statistics Canada noted that the December increase was the smallest one in over a year. It was also the smallest rise among the provinces, with the exception of Prince Edward Island, as its 12-month price rise was on par with November.
to view saved quotes
More
Print
