For Retailers, Tentative Hope for the Future

On the winds of a burgeoning economy, it seems as if the sails of independent retailers may be leading them to sunnier shores. A full two-thirds of the nation’s retailers are, in fact, reporting first-quarter earnings that exceed the expectations and proclamations of analysts. And with the strong first quarter of 2010 behind us, those retailers are actually fostering hope for greater gains to come, as consumer spending continues to recover.

Yet despite profits being up a very healthy 26 percent on average from this time last year (according to Thomson Reuters,) it is also important, according to those analysts, to remain cautious as we move forward into a period of recovery. It is expected, according to Reuters data, that the growth of retail profit will most likely slow down to 17 percent during the second and third quarters of 2010, and possibly to 11 percent by year’s end.

“There are headwinds coming,” said brokerage analyst Robert Samuels in a recent Wall Street Journal interview. “The second half of the year could be a lot tougher than the first half. Consumers are still very cost-conscious and not exactly free-spending. Business is still very unpredictable.”