RETAIL CONFIDENCE DIPS: A GOOD STAFF IS HARD TO FIND.
HFN's quarterly measure of retail executive sentiment dipped more than two points in the second quarter, to 67 from 69.4 in the previous period.
Because a measure above 50 reflects more positive than negative outlooks, overall sentiment remains high. But not as high as it had been.
Ironically, the diminished sentiment may reflect one of the strengths of the current overall economic cycle -- low joblessness. Asked to specify the greatest challenge facing their respective industry segments today, well over half of the executives, or almost 58 percent, specified "shortage of qualified personnel," a problem typifying robust employment.
The nation's jobless rate, which was at 4.2 percent in May, is at an historic low, according to the U.S. Bureau of Labor Statistics. The monthly rate has been below 4.5 percent since November, and yearly unemployment has declined steadily since 1993. While an increase in the number of job holders translates into more purchases (of all items), employers find it difficult to woo talented workers, who are in a better position to pick and choose among job offers.
HFN's exclusive measure of retail sentiment, launched in December, asks chief executives their evaluations of current industry conditions, their belief in future conditions and their expectations for their own firms' profits.
In the second quarter, more of them view current conditions as inferior to those six months ago. While they expect overall conditions to remain as they are for the next six months, the CEOs foresee a somewhat less-rosy picture for their profits.
Beyond the shortage of qualified personnel, one out of six retailers said the greatest challenge facing their industry segments today was poor supplier service, and one in eight specified industry consolidation.
Other key challenges mentioned by the retail leaders included the threat of rising interest rates, the possibility of a stock market turndown, excess retail space, product quality and deflationary pricing.
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|Publication:||HFN The Weekly Newspaper for the Home Furnishing Network|
|Date:||Jun 28, 1999|
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