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ICR XChange 2008 Consumer Outlook Survey

ICR today announced the results of its survey of the institutional investment community on the state of the consumer industry. The findings were released at the 10th annual ICR XChange Consumer/Retail Conference in Dana Point, Calif.

The survey was conducted online the week of January 7th and included 350 members of the investment community who focus on the consumer sector. 48 percent of respondents were institutional investors (buy side), 42 percent were research analysts and investment bankers from the consumer sector (sell side), seven (7) percent private equity, two (2) percent company executives and one (1) percent other investors and consultants.

Survey questions:

Which retail sector will be the healthiest in 2008?

  • Buy-side: Affordable luxury (27%), Discount (25%), Teen Retail (21%)
  • Sell-side: Luxury (30%), Discount (27%), Teen Retail (20%), Affordable luxury (12%)
  • PE: Discount (35%), Affordable luxury (30%), Luxury (17%), Deep Discount (13%)
  • Overall: Luxury/Discount (27% each), Teen Retail (18%), Affordable Luxury (13%), Deep Discount (7%), Moderate Department Stores (5%), Better Department Stores (3%), Women's Specialty (1%)

Which restaurant sector will be the healthiest in 2008?

  • Buy-side: QSR (57%), Fast Casual (26%), Upscale Casual (10%), Fine Dining (7%)
  • Sell-side: QSR (42%), Fast Casual (26%), Fine Dining (18%), Upscale Casual (13%)
  • PE: Fast Casual (52%), QSR/Upscale Casual (each 22%), Fine Dining (4%)
  • Overall: QSR (46%), Fast Casual (29%), Upscale Casual (13%), Fine Dining (11%)

When do you think restaurant/retail stocks will bottom out? When will be the best time to buy?

  • Buy-side: Q2/Q3 (56% split), Q1 (18%), Q4 (12%), 2009 (9%), 2010 (4%)
  • Sell-side: Q2/Q3 (60% split), Q1 (15%), 2009 (14%), Q4 (11%)
  • PE: Q2 (39%), Q4/2009 (22% each), Q1/Q3 (9% each)
  • Overall: Q2 (31%), Q3 (28%), Q1 (15%), Q4/2009 (12% each), 2010 (2%)

Are you a buyer of restaurant stocks?

  • Buy-side: Yes/Cautiously (44%), No (56%)
  • Sell-side: Yes/Cautiously (23%), No (77%)
  • PE: Yes/Cautiously (39%, No (61%)
  • Overall: Yes/Cautiously (34%), No (66%)

Are you a buyer of retail stocks?

  • Buy-side: Yes/Cautiously (66%), No (35%)
  • Sell-side: Yes/Cautiously (55%), No (45%)
  • PE: Yes/Cautiously (86%), No (14%)
  • Overall: Yes/Cautiously (61%), No (39%)

Do you think the consumer will be trading down in 2008?

  • Overall: Yes (85%), No (15%)

Rank of the economic factors that more directly correlate with sales patterns (overall):

  1. Housing Market
  2. Oil/Gas Costs
  3. Credit Market
  4. Rising Costs

To what degree do you think the weak dollar has impacted domestic consumer businesses?

  • Buy-side: Helped (33%), Hurt (31%), No Impact (35%)
  • Sell-side: Helped (34%), Hurt (35%), No Impact (31%)
  • PE: Helped (22%), Hurt (43%), No Impact (35%)
  • Overall: Helped (32%), Hurt (35%), No Impact (33%)

What is your outlook on the health of the American consumer in 2008?

  • Buy-side: Better than 2007 (3%), Same as 2007 (7%), Moderately below 2007 (55%), Worse than 2007 (35%)
  • Sell-side: Better (2%), Same (14%), Moderately below (52%), Worse (33%)
  • PE: Same (13%), Moderately Below (70%), Worse (17%)
  • Overall: Better (3%), Same (11%), Moderately Below (54%), Worse (32%)

Source: ICR XChange 2008