At GlobalShop in March, we heard generally positive comments from A.R.E. -Association for Retail Environments (formerly NASFM) members about their forecasts for 2008. This optimism corroborates the results of our eighth annual Revenue Trends Survey, conducted by A.R.E. the week of March 10. Sixty-six member companies participated in this confidential, online survey, including store fixture companies, design firms, and suppliers of visual presentation products. Results show that the median company in our industry is projecting 3 percent growth in revenues for 2008. This same group of companies reported median sales growth of 10 percent in 2007. If this preliminary forecast for 2007 final results is confirmed by A.R.E.’s more detailed Industry Financial Performance Report (to be released in June), 2007 will mark the fifth consecutive year of growth in our industry.
The March survey shows that our industry companies have revised their expectations for growth in 2008; last September, our member companies were projecting 10 percent growth in 2008.
Participants identifying themselves as store fixture companies project 2 percent growth in 2008, on top of a robust 11 percent growth rate in 2007. The visual presentation product suppliers are predicting a slightly more optimistic 11 percent growth rate in 2008, on top of 8 percent growth in 2007.
The A.R.E. Revenue Trends Survey does not pretend to be statistically valid. However, in recent years it has been a useful forecasting tool for our industry. In March 2005 we predicted 2005 sales growth of 9.5 percent and actual growth ended up at 11.6 percent. In March 2006 our survey projected 10 percent sales growth and we ended up with 8.2 percent growth. We do not have final numbers as of this date for 2007, but our March 2007 prediction of 10 percent growth for last year appears to be on track.
The last time GlobalShop was held in Chicago was March 16-18, 2003. It was just as the Iraq war was about to begin and our industry had been through sales declines in 2001 and 2002. It was not an optimistic time—to say the least. But it turned out that the next four-plus years were strong for our industry.
The projection for 3 percent growth in 2008 is obviously weaker than projections for the past three years, but it is nonetheless positive. Taken in the context of the waves of negativity in the business media in March of 2008, 3 percent growth sounds just fine!
Klein Merriman, director A.R.E, Association for Retail Environments. USA, 15th April 2008.