No Double-Dip Recession, But U.S. Economy Will Continue to Struggle in 2012
JERSEY CITY, N.J. -- The U.S. economy continues to feel the fallout of The Great Recession, said Maureen Maguire, president of ThinkResearch and Convenience Store News' partner on its annual Industry Forecast Study. Citing continuing problems in both the housing and labor markets, Maguire, speaking at CSNews' Forecast Council here this week, said consumer pessimism -- fueled by gridlock in Washington, Wall Street protesters and a negative national media -- will adversely impact retail sales in the year ahead.
Although the recession officially ended in June 2009, "it will officially feel like it lasts through 2012," Maguire predicted to an audience consisting of some of the biggest retailers in the convenience store industry. This year's CSNews Industry Forecast Council, sponsored by General Mills, included representatives from 7-Eleven Inc., RaceTrac Petroleum, The Pantry Inc., Susser Holdings Corp./Stripes, Alon USA, BP ampm, Quick Chek, Handee Marts and Circle K.
During the Forecast Council meeting, Maguire presented these conclusions about the prospects for the U.S. economy in the coming year:
• Real gross domestic product (GDP) will grow by 2.9 percent in 2012, compared with a projected 1.7-percent gain for 2011;
• Inflation will rise 2.9 percent, following a 3.2-percent increase in the Consumer Price Index in 2011; • Total retail sales will grow by 4.6 percent in 2012, after a 7.5-percent increase in 2011;
• Unemployment rates will drop from the current 9 percent to a still high 8.7 percent in 2012; and
• The rate of 10-year Treasury Bonds will drop to 2.3 percent in 2012, from a low of 2.8 percent in 2011.
Still, there are several bright spots in the forecast for convenience stores. The CSNews Forecast Study model predicts that key product categories such as chocolate candy, other tobacco products (particularly moist snuff and snus), and energy products (energy drinks, shots and bars) will see strong unit and dollar sales increases in 2012. However, cigarettes, gum, mints, carbonated soft drinks and malt beverages will struggle next year.
This year's Forecast Council also included special presentations from General Mills' Senior Manager of Consumer Insights Krista Loria on how consumers make purchase decisions for immediate consumption products, and Matt Mandeltort from Technomic Inc. on the top opportunities for c-store foodservice.