Sales projections for 2012 call for 10 percent growth, although not all industry segments will achieve that same level. <i>Photo courtesy of Wind Mill Slatwall Products</i>
Sales projections for 2012 call for 10 percent growth, although not all industry segments will achieve that same level. <i>Photo courtesy of Wind Mill Slatwall Products</i>

Research by the Association for Retail Environments (A.R.E.) has business continuing to show improvement for the third straight year. Following an estimated 10 percent growth in 2011, projections call for an additional 10 percent growth in 2012, although not all industry segments will achieve that same level, said Klein Merriman, executive director.

“The recovery is different for luxury retailers versus mid-market stores, and it’s very different for new store construction versus remodel activity. But all evidence indicates that the uneven recovery in capital expenditures taking hold in the retail environments industry will continue for a third year in a row in 2012,” he said. Tempering the growth projection, Merriman said, is the fact that there are fewer companies producing products for retail environments than there were in 2007.

Retail Environments Continue to Rebound in 2012However, that also means more sales opportunities for the North American producers of fixtures, displays mannequins and other products, including projects on other continents. According to A.R.E. member research conducted last summer, 33 percent of the companies said 10 percent or more of their sales are from international projects. In a different survey, Merriman reported, 67 percent of retailers reported that they preferred to work with North American vendors in sourcing fixtures, displays, products, and other services for international locations. “This is a logical extension of the trend of North American-based retail design firms doing more and more of their work for international projects,” he said.

“There are definite bright spots in this otherwise modest recovery. New retailers and brands morphing into retailers enter the market almost non-stop. And many luxury brands and retailers are continuing to invest heavily in both new locations and remodels. This expansion by luxury retailers explains the anecdotal evidence we’ve seen that vendors in this segment, including higher-end architectural millwork firms, have fared better than average in the past two years.

“And, at the other end of the spectrum, it’s been a good couple of years for firms providing fixtures for the rapidly expanding dollar stores. ‘Recovery’ is really about healing, and more healing is the prescription for the retail environments industry in 2012. In general, retailers appear to have adequate cash on their balance sheets to fund both ongoing renovations and increased new store openings in 2012. And to date, the consumer appears to be cooperating with increased spending, which bodes well for the future.”

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