Nearly 40 percent of the Kentucky Retail Federation’s (KRF) State of the Retail Industry Survey respondents said their local economy is better this year compared to last. Roughly the same number of respondents said not much had changed since 2017 – good or bad.
As for the financial condition of their business, responses were very similar: 25 percent said this year is worse than last year while the remaining were split almost evenly that 2018 has been better or the same financially.
According to the National Retail Federation, consumer optimism is trending upward again this year with consumers expected to spend record amounts on holiday shopping.
“We’re seeing guarded optimism from Kentucky independent retailers,” said Sarah Rowlette, KRF director of communications. “Heading into the official kick-off weekend of the holiday shopping season, 30 percent of independent retailers across the commonwealth are anticipating stronger consumer confidence over last year, while roughly half say consumer confidence will stay the same.”
Similarly, just under half of the surveyed retailers anticipate their holiday sales to equal those of 2017 while the remaining responses show an even split in anticipated sales exceeding (24 percent) or falling short (23 percent) of last year.
Retailers’ expectations for Small Business Saturday continue to climb as this year more small business owners surveyed anticipate the “shop small” date to be their busiest holiday sales day. This is the first year KRF has seen Small Business Saturday become a more popular response than dates like “Super Saturday” (the final Saturday before December 25) or the general two week period leading up to Christmas, with 30 percent saying Small Business Saturday and 27 percent saying Super Saturday.
“The shop local movement has grown tremendously in recent years and we are seeing more retailers embrace Small Business Saturday, which is increasingly promoted by local and national groups as well,” said Rowlette. “The Kentucky Retail Federation regularly highlights independent retailers through an initiative called Shop Our Town™, in partnership with the Kentucky Retail Institute.”
Despite expectations for increased holiday spending and overall consumer confidence improving, business owners are hesitant as they approach the new year. Survey respondents overwhelmingly point to the effects of tariff uncertainty, reporting increased shipping and freight rates and increased cost of inventory as their biggest challenges going into 2019, with many mentioning notices from suppliers regarding increases coming their way.
Ninety percent of independent retailers have seen an increase in their cost of goods sold this year. Operational costs also continue to rise as 89 percent surveyed saw an increase in 2018.
The Kentucky Retail Federation’s State of the Retail Industry / Holiday Survey is conducted annually in the fall. The survey asked more than 1,700 independent retailers in various retail sectors questions about the current state of the commonwealth’s retail industry and the 2018 holiday shopping season.