Source: www.insideradio.com, September 2023
After an extended period of choppiness, retail sales are getting back to normal. And local business owners are less pessimistic about what lies ahead. Heading toward the crucial fourth quarter, this is the picture of local advertisers that is emerging from new research unveiled last week by Borrell Associates.
Retail sales through July of this year are “very comparable” to 2022, which was “the best year as far as raw retail sales go,” Borrell’s chief researcher Corey Elliott told an online audience. “It’s settling in to this normal and it’s higher than it’s been in quite some time. But the story is different for different business types.”
Hardware store sales, for example, are even higher than the record breaking year of 2022. Sales of furniture and home furnishings, which crashed in 2020 before rebounding during the past two years, are down again but not as bad as in 2020.
After bottoming out in 2020, department stores are back to normal sales trends.
New car sales, which have fluctuated in 2023, were strong in August.
“We see retail sales are rediscovering their rhythm and could be higher than they were in previous times,” Elliot said.
Meanwhile, the outlook from the small and medium businesses that power the local economy has become less pessimistic. In fact, pessimism has been at its lowest point in the last couple of years. Half of the few hundred local advertisers in Borrell’s SMB panel believe it is tougher than it was six months ago, a vast improvement over 2022. One in four said the economic conditions for sustaining a small business environment in August 2023 were good or excellent, the highest level since August 2018.
Looking ahead, 29% say conditions are going to get better in the next six months, the highest number in Borrell’s survey since August 2018.
How does that affect their marketing? The number of SMBs in the Borrell panel who are increasing their ad budgets is holding steady while the ad cutters are declining. The latest numbers have 22% saying they’re planning to spend more and 13% indicating they will spend less.
This optimism is also reflected in how busy local businesses expect to be in the holiday season. Two in ten say they expect the 2023 Christmas and Hanukkah holidays to be busier than last year.
“What you should take from this overall is the [forecasting] machine is coming out with a less dramatic [projection] year to year,” Elliott said. “It’s not an evening out, but it’s less up and down than was projected before because of all of these things that we’re seeing in the market and the sentiments from local advertisers.”
