Tuesday, May 15, 2012

Fuel Prices Raising Concern

Published May 15, 2012


By Philippe Crowe


As summer approaches, retailers are feeling the heat from volatile fuel prices.



A study by BDO USA, LLP found that while the economy remains the top risk for the nation’s largest retailers, concerns over fuel prices outpaced unemployment for the first time since 2009.



Of the 99 percent of retailers citing general economic conditions as a risk, 71 percent point to fuel prices as a primary reason, up from 58 percent last year. With tepid progress in job reports, 68 percent of retailers note lingering concerns over unemployment, but the risk is down from its peak in 2010 (70 percent).



The BDO RiskFactor Report for Retail Businesses, which examines the risk factors listed in the most recent SEC 10-K filings of the largest 100 public U.S. retailers, also found that IT infrastructure and security risks have increased, partially due to growth of the mobile platform. This year, concerns over the maintenance of IT systems and operations leaped from the 12th most cited risk factor to the 6th. Following the significant data breach at Global Payments, security risks jumped 31 percent from the 19th most cited risk factor to the 12th.



As retailers have more data than ever to protect and increasing endpoints due to the increased use of mobile devices, business interruption risks are also more worrisome.



Retailers also reported heightened concerns over geopolitical events and natural disasters, which moved from the 9th most cited risk factor to the 5th, largely due to the Japanese tsunami and volatility in the Middle East.



“Despite a dip in April, consumer spending has been improving, and retail executives feel that their strategy adjustments are on point,” said Doug Hart, partner in the Retail and Consumer Products Practice at BDO USA, LLP. “This year, there is an increasing concern over unknown external factors, such as IT security, supply chain disruptions and geo-political events that could derail the execution of their strategies. While retailers are also concerned about gas prices this summer, they are otherwise encouraged by consumer spending.”



While this may seem to favor fuel-efficient cars and/or electric vehicles, it also brings a shadow on how the EV infrastructure is being organized. Management of a car’s charging rate, payment for use of the public charger and interaction between the owner and the EV are all managed by some form of IT infrastructure.






1 comments:

Thank you good post and Very good information.

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