NARMS: 48% of retailers say the recession has hurt projects

Stevens Point, WI .. With gloom and doom predictions dominating the retail landscape, NARMS International decided to poll its members on how the current economic recession is affecting their specific business. In December, 2008, NARMS members answered nine questions designed to gauge how the difficulties being reported by retailers and manufacturers have impacted the number and types of at-retail merchandising and marketing programs being utilized. The member survey also gave a glimpse of how conditions might be shaping the possibilities for retail job opportunities in the near future.

A significant number of companies (48% of those responding) indicated that the number of projects their company executes has been negatively affected by the recession. However, 34% showed they had remained unaffected and 18% said that business has actually increased during the downturn. That means that an equally significant number of respondents (52%) are still perceived as adding value and/or providing additional value to stimulate sales and service in the marketplace.

A huge issue for members of the at-retail industry is cash flow. Since they perform sales building services at stores, these services can’t simply be undone when payment is not received. There is a legitimate negative trickle-down effect going on with 49% saying they are having difficulty receiving payment of services rendered. Sixty-one percent of those said that they were more often getting paid 60-days after their terms indicate.

It appears the key to surviving and even thriving in a tough economy is innovation, creativity and service. Very few respondents (2%) said they have backed off on the service variety that they offer. Forty-three percent have actually changed their service mix to address the needs of struggling retailers and manufacturers.

Of course, adjustments have to be made. It is perhaps surprising to note that 41% report that they have kept their field workforce intact and 14% said it has actually increased. There are some members who are experiencing a downturn with 31% saying that they have decreased their workforce size and another 14% who anticipate a decrease.

The field management structures of our member companies mirror the field force with 55% remaining unchanged and 8% increasing field management. Twenty-nine percent reported a decrease and another 8% say they anticipate a decrease.

Management and headquarters also follow this path. Fifty-two percent have remained unchanged and six percent have increased staff. Thirty-two percent reported a decrease and another 10% anticipate a decrease.

But what about NARMS member’s bottom line? We as an industry are definitely not coming out unscathed. Those who are reporting a decrease to their net profit total 52%. Only 14% are saying they will increase and another 34% are holding fast.

The summation message of the NARMS Economic survey seems to be this: “Times are tough, but we are tougher.” NARMS members continue to invest in people, systems and infrastructure with only 20% indicating that their line credit has decreased while ten percent show they have increased. Taken as a whole, serious business challenges exist. The numbers say that members of NARMS International are up to the challenge.

NARMS’ 511 member companies perform well over $3 billion in merchandising services, sales marketing, event marketing, demonstration and other retail services annually. The international trade association serves as a “central gathering point” for the retailing industry; establishing and promoting industry standards; providing critical industry research studies and educational information about the industry while acting as a voice for its diverse membership of service providers, manufacturers, retailers and associates. NARMS represents all classes of trade including: grocery, mass, department, home and building centers, computer and office supply, electronic, value retailers, specialty and convenience retailers. Additional NARMS information is available at, including information about the upcoming 14th NARMS Spring Conference & Exposition at The Broadmoor in Colorado Springs, CO on April 4-7, 2009.