The Red Book’s Pam Ayers sends me a spreadsheet every week with the credit agency’s “RAP” scores for the industry.

 In concise terms, the credit rating service computes an “average days to pay” for different sectors of the market and for the “all industry average,” compared with a year ago. Looking at the numbers this week, the contrast between a year ago and today is remarkable.

The all industry average for days to pay for the week ending Aug. 24 was 36.12 days, compared with the industry average of 19.9 days for the same week last year.

AnnMarie Wills, general manager of Red Book Credit Services (a sister company of The Packer), said in an email Monday that some segments are paying far slower than that, going so far as to call some stats “unprecedented.”

The performance of buyers is notable. Last year, the buying sector’s average days to pay was reported at 25.9 days. This year, Red Book’s average for buyers was a whopping 45 days.

Brokers paid in 29.6 days for the week ending Aug. 24, up from 26.2 days last year.  Sellers paid in an average of 45.6 days, up from 23.2 days a year ago.

The check wasn’t in the mail for international business. The Red Book reports the average days to pay for exporters was 121 days, and 109 days for importers.

The strain is showing from the downturn in the economy. Though there are some reasons for optimism in recent market sentiment, continued high unemployment will challenge both the retail and foodservice sectors. Here is an excerpt from The Conference Board’s consumer confidence index report for July:

Overall, consumers remain quite pessimistic about the short-term outlook. The percent of consumers anticipating an improvement in business conditions over the next six months decreased to 18.0 percent from 20.9 percent, however, those expecting conditions to worsen decreased to 18.9 percent from 20.4 percent.

As I just read in this Packer coverage from the Los Angeles market, companies are “pleased to still be in business.”

Tom Burfield writes:

In years past, produce companies in the Los Angeles area were happy to report that business was on the rise.
This year, companies still are happy, but their expectation level has lowered significantly. They’re happy that they and their customers still are in business.


TK:  Riding out a recession is one thing, but this type of unprecedented strain on the economy is taking its toll. For now, we’ll forego the motivational speeches about reaching for the stars; it is enough to say that success today is continued the viability of your customers and your role in serving them.