Industry Sector Analysis Shows "Mixed Bag" For Retail Industry
The face of the U.S. retail industry continues to change as market share continues to slip away from more traditional retailers, according to industry analysis from global trade credit insurer and accounts receivable management service provider Euler Hermes ACI.
Owings Mills, MD (PRWEB) February 28, 2007 -- Traditional retailers continue to lose ground in competitive marketplace. The face of the U.S. retail industry continues to change as market share continues to slip away from more traditional retailers, according to industry analysis from global trade credit insurer and accounts receivable management service provider Euler Hermes ACI.
In the latest Euler Hermes ACI U.S. Industry Outlook, the forecasts for four major retail industry sectors - Club Stores, Drug Stores, Sporting Goods Retailers, and Grocery Stores - range from "positive" to "weakened," with mass merchandisers and club stores gaining the most ground in the highly competitive retail marketplace. "Competition for customers is fierce, and each retailer - regardless of the industry sector - is intensifying the competition for a bigger portion of each American household's consumer spending budget," said Euler Hermes ACI Risk VP-Industry Manager Steve Lapsley. "To that end, traditional retailers are continuing to feel the pressure brought on by the larger mass retailers, such as Wal-Mart and Target."
In several instances, the four industry sectors featured in the Industry Outlook are linked by their competition. Drug Stores and Sporting Goods Retailers are both feeling intense competition from large mass retail outlets, "especially Wal-Mart, which is the leading sporting goods retailer with approximately $8 billion in sales in that sector," said Lapsley. "And their new $4 generic prescription drug program - which has already been duplicated by Target - is further diluting a prescription drug marketplace that already features fierce competition."
Meanwhile, Club Stores and Grocery Stores remain rivals in the food retailing arena, as traditional supermarket chains continue to be challenged by the growth of alternative formats, including the popular warehouse clubs. "It is worthy to note that all three major Club Stores - Costco, Sam's Club, and BJ's - list their leading sales category as food," said Lapsley. "The Club Stores continuing to expand and grow their food offering will force even more consolidation in the Grocery industry."
With increased risk forecast for two of the four retail industry sectors, businesses throughout the supply chain should look to protect their cash flow by utilizing accounts receivable management products and services, such as trade credit insurance and third-party commercial collections. "Accounts receivable, which typically represent up to 40% of a company's assets, are naturally a vital component of a healthy business," said Euler Hermes ACI Executive Vice President Joe Ketzner. "If a major customer is unable to pay its invoices, or if several customers are unable to pay their invoices, there will be a negative impact to cash flow, earnings, and capital. In a worst-case scenario, this could literally put a company out of business. These risks require thorough analysis, which our company provides to its clients on a routine basis."
The February 2007 issue of the Euler Hermes ACI U.S. Industry Outlook is available upon request. For more information, visit www.eulerhermes.com/usa.
Euler Hermes ACI is North America's oldest and largest provider of trade credit insurance and accounts receivable management solutions and is the US subsidiary of the Euler Hermes Group. Headquartered in Owings Mills, MD, the company protects and insures more than $125 billion in US trade transactions annually. Additionally, Euler Hermes ACI provides a suite of receivables management services that includes commercial third party collections, receivables management outsourcing, and international collections. For more information, visit www.eulerhermes.com/usa.
Euler Hermes is the worldwide leader in credit insurance and one of the leaders in bonding and guarantees. With 5,500 employees in 48 countries, Euler Hermes offers a complete range of services for the management of customer receivables and posted a consolidated turnover of 2.01 billion euros in 2006.
Euler Hermes, a subsidiary of AGF and a member of Allianz, is listed on Euronext Paris. Standard & Poor's rates the group and its principal credit insurance subsidiaries AA-.
Press Contact:
Rick Ostopowicz
Euler Hermes ACI Public Relations and Communications Specialist
Phone: (410) 753-0652
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