Proceeding With Caution

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Proceeding With Caution

09/29/2006
NEW YORK -- Convenience retailers are looking warily at business conditions over the next six months. According to the latest VNU Retail Index results, only 50 percent of c-store respondents reported positive expectations for the remainder of the year, compared to 75 percent who felt positive a year ago.

This uneasiness is shared by both supermarket and mass/drug operators, who are also less positive about future conditions than they were last year at this time. Overall, the VNU Retail Index of Current Business Conditions stood at 93.8 in August, while the Future Index was 88.1.

While economic conditions led the list of challenges to earnings growth in July, by August the competitive environment moved back into the top spot, where it has resided for most of the past year.

"Given the preponderance of slowing economic drivers, expect an overall moderation in economic activity as we head into the fourth quarter of 2006, predicted James Russo, General Manager of VNU's Executive Perspective, adding, "Retail sales will continue to be restrained as well."