Just as we saw in 2010, we fully expect 2011 to pose challenges and opportunities for the retail industry. Our hope is for the U.S. and global economy to continue to recover from the worst recession in recent history. Although consumers have accumulated some spending power, they still lack confidence. Until we see improvement in unemployment, it will be difficult to sustain any real momentum in sales. Retailers will be cautious as they proceed in 2011, paying close attention to economic indicators throughout the year.
Given the numerous challenges retailers faced in 2010, many were able to make adjustments to their supply chains to remain competitive and even make themselves stronger. Uncertainty in 2011 will again challenge retailers’ supply chains. We expect capacity and pricing issues to impact supply chain operations in the coming year. We also anticipate new regulatory burdens, including potential changes to trucking hours of service, implementation of the Comprehensive Safety Analysis 2010 in trucking and potential regulations impacting air cargo security.
While we face this uncertainty, expectations remain high from customers and investors that retailers are nimble enough in their supply chain operations to mitigate any potential disruption or uncertainty they may face. These potential disruptions are vastly different and more complex than a few years ago. Expectations are to plan for these challenges in a cost-neutral manner with the same amount of resources.