Another Year of Lethargic Growth in the Consumer Products Industry?
Friday Morning Dealmakers Column
Consumer spending, largely tied to employment growth, will likely maintain its slow uptrend in 2012. Interestingly, corporate profitability has increased sharply over the past two years reflecting rising worker productivity and an ability to pass through higher costs. However, few companies are willing to expand or invest due to inaction in Washington and fear of a further tightening in the regulatory environment. They seem inclined to only add to the workforce if and when there is a more defined upturn in business, rather than bear the burden of higher costs in anticipation of recovery. Thus, it seems a 2 percent real GDP growth is a reasonable expectation, followed by a similar increase in employment and consumer spending. Importantly, this does translate into higher retail sales, but a rising tide will not lift all ships. Market share will be an integral part of vendor and retailer sales growth this year.To learn more about this and other industry trends, register for “Consumer products: Deal successes, challenges and trends,” a webcast presented by McGladrey on Wednesday, Feb. 8, 2 p.m. EST, with guest speakers from PitchBook and Harris Williams.
Also, download McGladrey’s recent white paper, “Retail and consumer products: Entering a new era of growth.”
By Jeff Edelman, former industry analyst and current director of retail and consumer products advisory services with McGladrey