"It's fair to say no one has come out a 'winner' from the Great Recession in the conventional sense," said an opinion piece in the newspaper. "Mere survival counts as winning in the worst economic downturn since the Dirty Thirties.... Unlikely as it seems, there have been a few winners by any definition of that term in the midst of these remarkably trying times."
Concerning [image-nocss] Bouchard and Laval, Quebec-based Couche-Tard, the report said, "In the guts of a recession, Bouchard pulled off the always difficult feat of integrating his Canadian convenience store chain, whose banners include Mac's and Couche-Tard (roughly translated as "night owl") with a huge acquisition, the huge Circle K chain in the U.S. Most recently the No. 2 convenience store operator in North America, trailing only 7-Eleven, snapped up the On the Run convenience outlets at Exxon, Mobil and Esso filling stations, bringing the Couche-Tard empire to 5,906 stores."
Among related retail businesses, the paper also cited Tim Horton's and McDonald's.
Concerning Donald Schroeder, president and CEO of Tim Hortons Inc., Oakville, Ont., it said, "Tim Hortons has powered through the recession with new store openings and menu offerings, not letting a downturn get in the way of snapping up high-traffic locations in Canada and the U.S., moving into inner-city districts and kiosk locations in office towers, hospitals and other institutional settings. Which accounts for Tim's status as North America's fourth-largest publicly traded quick-service restaurant chain, with 2,939 outlets in Canada and 536 in the U.S. The American market has been tough for Tim's, but it has persisted for more than a decade, this summer opening more than a dozen high-profile stores in Times Square, Madison Square Garden and other New York locations."
And concerning Jim Skinner, CEO of McDonald's Corp., Oak Brook, Ill., it said, "The Golden Arches 'experience,' thoroughly criticized in the films Fast Food Nation and Supersize Me, is so cheap and ubiquitous that consumers trading down since 2008 have found it less expensive than eating at home. The successful McCafe line has created a new revenue stream for a 54-year-old company that long ago lost its 'growth-stock' status. New tiered menus of cheap to expensive food options have been a hit in Europe. The firm has 66% of its stores outside the U.S., many in nations such as China (1,000 stores alone) where McDonald's is an 'aspirational' experience for those enamored of Western culture. Thus Big M's stock shared company only with that of Wal-Mart Stores Inc. among members of the Dow Jones industrial average in posting gains last year. Its shares have outperformed the S&P 500 over the past three years."
Meanwhile, faced with one of the most challenging years on record, retailers and those who supply them believe that consumer spending will lag the turnaround of the U.S. financial markets. According to a new study, "U.S. Small & Middle Market Outlook 2009: Retailers & Suppliers Take Stock of Economic Downturn," released by CIT Group Inc., a provider of financing to small businesses and middle-market companies, 47% of retail respondents believe the financial markets will turn around next year; separately, 45% believe that consumer spending will not return to 2007 levels until 2011 or 2012.
The report examines how retailers and their suppliers are navigating through the current financial crisis. The continuing softness in the retail market has caused many retailers to reevaluate and adjust their business models. They are taking a more conservative and cautious approach to the upcoming holiday season by controlling their inventories and are planning more aggressive discounts earlier in the season.Other key findings among retail respondents include: 67% will stock less inventory than in 2008. 69% will expand online and direct selling. 56% will advertise more aggressively. 66% will offer greater discounts. 68% will hold clearance and other sales prior to New Year's Day. "These results corroborate what we have been hearing anecdotally from the marketplace," said Burt Feinberg, managing director and industry group head of retail finance at CIT. "Many retailers continue to be concerned about consumer demand and are following conservative inventory and pricing tactics in anticipation of the upcoming holiday season, trying to maintain liquidity, so that they can be better positioned for what is hopefully resumption in consumer spending in 2010."
Jon Lucas, executive vice president and chief sales officer of trade finance at CIT, said, "The decline in consumer spending has trickled down from retailers to the manufacturers and vendors that supply them. Many of these suppliers are managing through this business cycle by cutting expenses, imposing more stringent credit terms on their retail customers, and doing less business with slow paying retailers. In addition, many have turned to factoring and credit protection services to protect the value of their accounts receivable, if they do not already have those relationships in place."Additional findings: Cautiously awaiting the return of consumer confidence. While half of middle-market retailers saw their revenues decline over the past 12 months, 41% expect their revenues to grow over the next year; however, growth rates may be tempered by consumer spending issues; only about one-third (32%) indicated that they expect consumer spending to reach 2007 levels in 2010, while nearly 45% thought it would take at least until 2011 or 2012 for such spending to resume, and 17% said it would occur after 2012. Cutting costs and conserving cash. In light of the economic downturn, retailers have had to alter their strategies; 46% have reduced their staff levels, 42% halted planned expansions, 29% delayed store renovations, 29% re-merchandised their shelves and 21% closed stores. In addition, 40% renegotiated their rent and 38% received other concessions from their landlords. Increased merger & acquisition (M&A) activity on the horizon. Nearly half (48%) of all respondents expect M&A activity to increase over the next 12 months. They believe that the primary drivers of M&A activity will be the greater availability of credit (34%), reduced valuations (32%) and the need for weaker companies to merge (26%). Inventory issues. Many retailers have already reduced their inventory levels -43% indicated that their current inventory levels are lower or significantly lower than they were a year ago. The cuts may not be deep enough; as nearly half (48%) of respondents said that they should have carried less inventory during the first half of 2009. The end result: 46% of retailers have cut prices in order to accelerate inventory turns. Retailer bankruptcies impacting suppliers. Two-thirds (66%) of suppliers have been affected by a retail customer bankruptcy and 59% expect additional retail bankruptcies in the next 12 months. In addition, 23% of suppliers said that they are using factoring and credit insurance more to protect themselves from possible customer bankruptcies. Managing customer relationships. To protect their businesses, more than half (60%) of suppliers are doing less business with retail customers with weak finances; 60% are monitoring their accounts receivable more closely; 54% are imposing more stringent credit terms and 39% are requiring deposits for new customers. At the same time, 30% are offering incentives to retail customers who pay early.
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