Sales growth up 12% in 2012
of respondents expect
Lasted from March
to July 2009
change in construction.
of respondents expect
compared to last year
SOURCE: AIA’s Consensus ForecastSOURCE: A.R.E. industry research
A.R.E.’s September survey of retail environments suppliers predicts 12 percent sales growth for 2012, and an additional 10 percent increase in 2013.
The chart shows the annual changes in sales of retail environments products and services of the median company in A.R.E.’s surveys.
“It all depends on whose tractor your wagon
is hitched to.” The “new normal” economy
continues to translate into uneven demand
and razor-thin profit margins for many of
the retail environments companies.
What industry segment vendor companies serve also continues to be a factor. Because we experienced such a large
decline in new home (and new shopping
center) construction, the store fixture
manufacturing segment has been hit the
hardest. Conversely, visual presentation
products have performed the best, according to A.R.E.’s revenue surveys. Retailers
who have been reluctant to return to
pre-recession levels of capital spending
have instead spent more on visual merchandising expenditures. According to our
preliminary data, these patterns continued
in 2012, with retail design firms and visual
presentation vendors growing faster than
the industry overall.
I also expect a number of the trends
I’ve highlighted in recent years to continue
• Speed will continue to be a critical competitive factor with shorter lead times for
both prototypes and production runs.
Supplier companies that focus on improving their cycle times to meet these needs
should be able to compete on other than
• Elements of the “barbell economy” will
continue as companies that serve either the
luxury end of the market or the deep dis-count/dollar store segment do well.
• Despite stumbles from retailers,
some North American retailers continue
to place an emphasis on international
expansion simply because that’s where
the growth is. And they are frequently
looking to their North American vendors
for assistance in expanding into these
A.R.E. members have a record of being
somewhat optimistic in predicting revenue. This is in part because member companies are overwhelmingly privately held
and typically run by entrepreneurs. And,
in my experience, entrepreneurs tend to be
a pretty optimistic bunch.
That said, it appears that many of the
prior conditions necessary for a continuing recovery in our industry in 2013 are in
place. If externalities like the November
elections, the much-debated “fiscal cliff,”
and oil price spikes do not overly influence
consumer demand, the outlook for our
industry is promising for 2013.
Klein Merriman is
executive director of the
Association for Retail
him at 954-241-4824