The Future Of Retail Is Uncertain, Just Ask CFOs

by MR Magazine Staff

Traditional retailers are struggling to predict their own fortunes. The percentage of retailers that beat their earnings estimates dropped roughly 20 percent since 2010 on a rolling 12-month basis, according to Bespoke Investment. They reached a 15-year low in 2015 and are seeing miss rates last seen at the beginning of the Great Recession. Retailers’ off-base forecasts demonstrate just how quickly the sector is changing and how little ability executives have to plan for it, let alone manage it. The misses are important because executives need to be able to understand their business if they want to make the investments necessary to save it. Retailers are closing hundreds of locations, but they don’t know the impact that store closings and liquidations will have on their revenues. They are investing in e-commerce, but they don’t know how many people will buy online and what that means for their in-store purchases. They are promoting in-store pickup, but they don’t know whether shoppers will take them up on it and save them from expensive shipping costs. Read more at CNBC.