CFOs at Leading U.S. Retailers Forecast 5.6 Percent Growth in 2007 According to BDO Seidman, LLP Study.

See Credit Issues Impacting Consumer Confidence for Remainder of Year

CHICAGO -- According to a new study by BDO Seidman, LLP, one of the nation's leading accounting and consulting organizations, chief financial officers (CFOs) at leading U.S. retailers are predicting 5.6 percent growth for 2007. Close to half (47%) of the CFOs cited high fuels costs as the issue having the greatest impact on consumer confidence in the first half of 2007. However, looking forward to the balance of the year, there was less agreement among the CFOs on the main issue that will impact consumer confidence. High fuel costs (29%) and the weak housing market (25%) were cited by at least one-quarter of these executives, while interest rates (19%) and the sub-prime lending crisis (15%) were also mentioned by a number of CFOs.

"When you consider that high fuel prices have been with us for some time now, the shift in concern towards issues such as interest rates and the sub-prime lending crisis seems to indicate a growing anxiety about a potential credit crunch for consumers," said Al Ferrara, a partner in the Retail and Consumer Products Practice at BDO Seidman. "Given the existing concern with the weak housing market - remember many consumers borrow based on the value of their homes - and the recent volatility in the stock market, discretionary income may dry up and that could have a negative impact on the retail sector as we move into the critical holiday shopping season."

These findings are from the most recent edition of the BDO Seidman Retail Compass Survey which examined the opinions of 140 chief financial officers at leading retailers located throughout the country. The retailers in the study were among the largest in the country, with revenues of more than $100 million, including 23 percent of the top 100 based on annual sales revenue. The survey was conducted in August of 2007.

Some of the major findings of BDO Seidman Retail Compass Survey of CFOs:

* Same Store Sales Lag Overall Growth. A slight majority of the retail CFOs (56%) reported an increase in sales revenue over 2006 during the first six months of this year. However, when considering only comparable store sales the percentage of retailers reporting an increase dropped to less than half (45%). Less than a fifth (18%) of the CFOs reported a decrease in revenues in the first half of the year, with 22 percent reporting a drop in comparable store sales.

* Rose Colored Glasses? Looking forward, a majority (71%) of the retailers anticipate total 2007 sales revenue to increase from 2006, with only 11 percent predicting a decrease. Overall, the CFOs estimated average revenue growth of 5.6 percent for 2007.

* Top 100 Retailers. The largest retailers have had the most positive results this year, with more than two-thirds (83%) of the CFOs at the top 100 retailers surveyed reporting increased sales in the initial six months of 2007. These executives were equally confident (83%) regarding growth for the full year; however the estimated growth rate for the top 100 retailers (4.6%) was a full point below all retailers.

* Weak Housing Concern of Largest Retailers. Among the financial officers at the top 100 retailers, almost half (45%) pointed to the weak housing market as the primary issue to impact consumer confidence during the remainder of the year, which is more than double the percentage of mentions (21%) among the balance of the retailers surveyed.

* Most Retailers Stay Close to Home. Less than a fifth (18%) of these leading retailers have stores or sales outside of the United States. However, close to half (45%) of the top 100 retailers report international sales.

* Internet Fastest Growing Sales Channel. Internet sales account for only eight percent of annual revenue among leading retailers and only 3 percent among top 100 retailers according to the CFOs. However, in terms of growth, almost half (49%) of the retailers cited the Internet as their fastest growing sales channel. One-third (33%) of the top 100 CFOs view the internet as their fastest growing channel.

The BDO Seidman Retail Compass Survey is a national telephone survey conducted by Market Measurement, Inc., an independent market research consulting firm, whose executive interviewers spoke directly to chief financial officers, using a telephone survey conducted within a scientifically-developed, pure random sample of the nation's largest retailers (with revenues ranging from over $100 million to billions of dollars).

BDO Seidman, LLP has been a valued business advisor to retail and consumer products companies for almost 100 years. The firm works with a wide variety of retail clients, ranging from multinational Fortune 500 corporations to more entrepreneurial businesses, on a myriad of accounting, tax and other financial issues.

About BDO Seidman, LLP

BDO Seidman, LLP is a national professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. Guided by core values including, competence, honesty and integrity, professionalism, dedication, responsibility and accountability for almost 100 years, BDO Seidman provides quality service and leadership through the active involvement of its most experienced and committed professionals.

BDO Seidman serves clients through 35 offices and more than 300 independent alliance firm locations nationwide. As a Member Firm of BDO International, BDO Seidman, LLP serves multi-national clients by leveraging a global network of resources comprised of 621 Member Firm offices in 107 countries. BDO International is a worldwide network of public accounting firms, called BDO Member Firms, serving international clients. Each BDO Member Firm is an independent legal entity in its own country.