Retail sales rebound but outlook gloomy

The world's 250 largest retailers posted in excess of five per cent sales growth in the 2010 fiscal year, (encompassing fiscal year ended June 2011), says 2012 Global Powers of Retailing Report from Deloitte Touche Tohmatsu Limited (DTTL), an established accountancy firm.

The report found profitability has improved, with net profit increasing to 3.8 per cent in 2010, up from 3.1 per cent in 2009.
While this performance is impressive, retailers were concerned on the deterioration in the world economy in the later half of last year, it said.

Consumer Business for Deloitte Research director Dr Ira Kalish said the global economy was slowing down, with this year's growth likely to be slower than last year in many of the world's leading markets. The eurozone debt crisis continues to drain investor and consumer confidence, while growth in the United States next year is unlikely to significantly reduce unemployment, said Dr Kalish.

"However, retailers may find some silver linings in this cloudy environment. One positive effect of slower global growth will be the continued dampening of commodity prices.

"For retailers, this means some improvement on the cost side of the ledger, while retail price inflation in some economies presents an opportunity for improved profit margins, even in the context of slow top-line growth," Dr Kalish added. -- BERNAMA