Retailers Looking to Grow Their U.S. Presence in 2013

Despite recent headlines trumpeting retailers’ entry into Canadian and overseas markets, U.S. expansion remains a key growth strategy. According to our 2013 BDO Retail Compass Survey of CFOs, 30 percent of CFOs say U.S. expansion will be their priority growth tactic in 2013. Expanding retailers like Apple and H&M will continue to look for Class-A store locations in high-traffic spots to afford better access and convenience for customers. In addition to store expansion, 24 percent of CFOs also say improving merchandise assortment will be a top growth tactic this year.

Headlines have also heralded the rise of e-commerce at the expense of brick-and-mortar, but our survey data suggests a more nuanced picture: While the opportunities in e-commerce are clear, the retail storefront isn’t poised to disappear anytime soon. In fact, retail executives still believe that U.S. stores are a core part of the business, with 26 percent of CFOs saying they will invest the most capital in redesigning/remodeling their stores. Shoppers have come to expect convenience and options, and improving the in-store experience and integrating it with the online and mobile experience have become more important than ever. Even online retailers, such as Bonobos and Warby Parker, recognize that a number of their consumers seek the opportunity to touch and test the merchandise before they buy, and in response have begun opening storefronts.

Amid plans to open new stores, fine-tune merchandise and expand online channels, many retailers will be looking to add staff in stores and their corporate offices. According to the NRF, the retail industry already supports one in four U.S. jobs, and over one-third of CFOs (34 percent) say the number of employees at their company will increase this year. Another 57 percent say the number of employees will stay about the same.

Of course, attracting and retaining strong leaders is also paramount to the success of these strategies. As a result, 30 percent of CFOs expect their management’s compensation to increase this year, and only 5 percent forecast a decrease, despite continued scrutiny around pay packages. Still, a majority of retailers (66 percent) say their company’s leaders have an incentive plan to tie pay to performance, and 71 percent say that a profitability-based metric is the primary measure.