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Industry Sales Up 2 Years In a Row!
The headlines for our industry sound pretty upbeat, don’t they? And, they are true! Recently, 94 A.R.E. member companies, including fixture providers, visual presentation companies, and retail design firms, responded to our A.R.E. Industry Revenue Trends Survey in September. Here’s the good news:
  • The median company reported growth in 2010 of 9.5 percent.
  • For 2011, these same companies project growth of 10 percent.
The obvious problem with these seemingly optimistic statistics is that the industry experienced such a steep decline in late 2008 and in 2009. In our September 2010 survey respondents were asked when they expect their companies’ sales to get back to the sales level they experienced in 2007. Here’s what they predicted:
  • 2012 or later— 66% of respondents
  • 2011—18% of respondents
  • 2010—17% of respondents have already surpassed their 2007 sales.
Not surprisingly, providers of visual presentation products and some point-of-purchase companies appear to have done better than the average during this downturn. New store construction and capital expenditure in general were particularly hard hit. On the flip side, expensed items such as visual presentation products appear to have done somewhat better. Retail design firms were also hit harder than the average, according to our data. This is consistent with the cutback in new store construction seen across almost all of retail. A bright spot for some retail design firms was the strength in demand for North American retail design in some international markets.

By all measures 2010 was a much better year than 2009 in the retail environments industry. In 2009, 46% of companies declined at least 25 percent in terms of sales. In contrast, in 2010 only 6% of our 94 responding companies will experience a sales drop of 25% or more, and only 15% expect any sales decline at all. Compare this to the 78% of companies experiencing a sales drop in 2009.

Relative optimism about prospects for 2011 seems broadly based according to survey respondents. In fact, only six of 94 respondents expect sales to decline next year—and no one expects a sales decline of greater than 25%. That certainly compares favorably to 2009 when 8 of our 92 respondents experienced a sales decrease of 50% or more.

I'd welcome your thoughts and observations. Please add a comment below.
Created By: Klein Merriman On: Tue, Sep 28, 2010 05:06 PM

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Mike Lauber October 01, 2010 8:51 am
The Great Recession has taken a tremendous toll on the industry that goes beyond the data from this survey. The survey respondents reported median sales declines of 25% in 2009 but neither this datum nor the 2010-2011 data capture the fact that a number of companies have simply gone away during this downturn. I bet that every reader can think of at least one failed company that they know. Bottom lines have taken far worse hits than top lines, too. In the end, however, most of us have survived and are emerging leaner, stronger and more focused than ever before. This industry colonic insures far better days ahead.
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