Letteratura scientifica selezionata sul tema "Retailer evaluations"

PurposeMany fashion brands employ growth strategies that involve strategically aligning with a retailer to offer exclusive co-brands that vary in duration and perceived fit. While growth and publicity are enticing, pursuing collaboration may change consumers' evaluation of the brand. Utilising commodity and categorisation theory, this research tests how a brand may successfully approach a co-brand with a retailer.Design/methodology/approachThree experimental studies manipulate and test the effect of co-brand duration (limited edition vs ongoing) (Study 1), the degree of brand-retailer fit (high vs low) (Study 2), and its combined effect (Study 3) on changes in consumers' brand evaluation.FindingsResults reveal that consumers' evaluations of brands become more favourable when: (1) brand-retailer co-brand make products available on a limited edition (vs ongoing) basis (Study 1), (2) consumers perceive a high (vs low) degree of brand-retailer fit (Study 2) and (3) both conditions are true (Study 3).Research limitations/implicationsIn light of commodity and categorisation theory, this study helps to understand the effectiveness of a brand-retailer co-branding strategy.Practical implicationsTo increase brand evaluations, brands should engage in a limited edition strategy, rather than ongoing when collaborating with retailers. It is also important to select an appropriately fitting retailer for a strategic partnership when creating a co-brand.Originality/valueWhile previous studies highlight the importance of perceived fit upon extension, perceived fit between brand and retailer co-brand had yet to be investigated. Additionally, this research investigates changes in brand evaluations to more accurately understand how co-branding strategies impact the brand.

Daily deal platforms, such as Groupon, peaked in the mid-2000s, by letting retailers offer 50% promotions to consumers using an app. When used right, retailers were able to get consumers to try them for the first time and build a customer base. When used wrong, retailers lost revenue unnecessarily and sometimes went out of business. Even now, in 2020, you can find lovers and haters of daily deals, and yet they remain an integral part of the marketing mix for many retailers. One lingering question about these deals remained: How do customers perceive a retailer that offers daily deals before going to the retailer? Do retailers look desperate or confident? Through a series of laboratory experiments, we test whether offering a deal changes consumers’ preconsumption brand evaluations. Our research shows that brand evaluations are contingent on the retailer type (i.e., price segment and age), the success of the current deals offered (i.e., number of page visits and purchases), and the number of competitors that are also using deals. Together, our work demonstrates specific conditions where offering deals may lead to positive or negative consumer perceptions even before arriving at the retailer.

Purpose – This paper aims to investigate the impact of advertising creativity on consumer perceptions of product quality, value, retailer brand attitude and purchase intention. Design/methodology/approach – Two experimental studies were conducted. Study 1 shows the impact of creativity (high/low) for two product categories (mineral water and chewing gum) and one known retailer. The findings are replicated and extended in Study 2 for four categories (mineral water, chewing gum, batteries and detergent) and two known retailers. Findings – The results show that advertising creativity positively signals perceived product quality, which increases perceived value. These effects fully mediate a positive impact on retailer brand attitude and purchase intentions. The positive effect of advertising creativity on perceived product quality is mediated by perceived advertisement effort. Practical implications – This study introduces advertising creativity as a way for retailers to increase perceived product quality and value. The results show that advertising creativity increases perceived effort on behalf of the sender, which positively influences purchase intentions. Originality/value – The current study shows that advertising creativity can work as a signal of product quality, which has positive effects for retailers.

Purpose – Understanding how retail performance can reduce risk perceptions and influence behavioral intentions remains a key issue for researchers. Consumer evaluations of a retailer's performance may form their risk perceptions and positive behavioral intentions toward the retailer. This study aims to extend previous research by proposing an integrative model that examines how three retail performance dimensions (product quality, service quality, and price fairness) influence consumer trust, risk perceptions, and repatronage intentions in the context of organic food retailing. Design/methodology/approach – Empirical data were collected from face-to-face interviews guided by a structural questionnaire. Consumers of organic food retailers located in Taiwan were asked to participate in the research and 416 usable questionnaires were collected. Structural equation modeling (SEM) through LISREL 8.70 was used to analyze the data. Findings – Results show that both product quality and price fairness have direct effects on consumer trust, risk perceptions, and indirect effects (through trust in retailer and transaction risk perceptions) on the intent to revisit an organic food retailer. Service quality only affects consumer trust directly, but not perceived transaction risk. In addition, service quality does not have a significant indirect effect on revisit intention. Originality/value – This study is the first to research essential issues for understanding the role of retail performance dimensions on transaction risk perceptions in organic food marketing practices in Taiwan.

This paper studies the trust issue in a two-echelon supply chain information sharing process. In a supply chain, the retailer reports the forecasted demand to the supplier. Traditionally, the supplier’s trust in the retailer’s reported information is based on the retailer’s reputation. However, this paper considers that trust is random and is also affected by the reputation and the demand gap. The supplier and retailer have been shown to have different evaluations regarding the degree of trust. Furthermore, distrust is inherently linked to perceived risk. To mitigate perceived risk, a two-stage decision process with an unpayback deposit contract is proposed. At the first stage, the supplier and the retailer negotiate the deposit contract. At the second stage, a Stackelberg game is used to determine the retailer’s reported demand and the supplier’s production quantity. We show that the deposits from the retailer’s and supplier’s perspectives are different. When the retailer’s reported demand is equal to the supplier’s forecasted demand, the retailer’s evaluation of the deposit is more than that of supplier’s. When the retailer’s reported demand is equal to the retailer’s forecasted demand, the deposit from the retailer’s perspective is at the lowest level.

Determinants of the growth of store brands (SBs) have been widely investigated in marketing literature. However, with reference to consumer studies, no contributions have focused on comparing strategies developed by grocery retailers to create SB value based on consumer evaluations. The present study aims to fill this knowledge gap by analysing the reasons behind the choice of SBs by consumers who shop at various retailers in Italian market. Data was collected through a computer-assisted telephone interview technique (CATI) based on a structured questionnaire. The final sample was formed by 979 SBs shoppers. The results show that, despite the evidence that socio-demographic profile of the shopper does not vary depending on the retailer attended, the level of importance of SB purchase determinants tend to differ for each retailer: this may reflect the way each distributor has developed its SB products and, therefore, the corresponding strategy adopted. These findings have several implications for retailer policy in positioning SB products.

This paper presents product marketing and inventory policy for a manufacturer and multi-retailer system under vendor managed inventory (VMI) mode of operation. The aim is to maximize individual profit where each firm interacted through decentralised supply chain. For this reason, the manufacturer often considers managing the system-wide inventories by determining replenishment cycles, backorder quantity, wholesale price, and advertising investment. Also, due to the information-asymmetric VMI, retailers sequentially need to determine their optimal retail prices and advertisement policies. In order to find the optimal solution i.e. better profit equilibrium for all supply chain channel, a Genetic Algorithm is proposed in this study. The proposed algorithm is assessed for its solution quality. Furthermore, the performance evaluations are given, to present an improvement to the model.

Purpose – The present aims to examine whether interindividual differences in consumers’ shopping orientations reflect a stable consumer disposition (i.e. chronic shopping orientation; CSO). Furthermore, it examines whether this disposition influences consumers’ evaluations of retailer communication. Consumers may shop under an experiential or a task-focused shopping orientation. Design/methodology/approach – This research builds on four studies; three were conducted online and one was conducted in the laboratory. Study 1 applied a longitudinal design, Studies 2 and 3 applied a cross-sectional design and Study 4 applied an experimental design. Findings – Study 1 shows that CSO is stable over time. Study 2 finds that interindividual differences in CSO are stable across different retail domains. Studies 3 and 4 demonstrate that experiential shoppers prefer stimulation-oriented claims, whereas task-focused shoppers prefer efficiency-oriented claims. Originality/value – The value of shopping orientation for customer segmentation and tailored marketing largely depends on whether interindividual differences in CSO are stable. The present research is the first to demonstrate that CSO, indeed, exists as a stable consumer disposition. In addition, the research demonstrates that shopping orientation moderates the evaluation of retailer communication. Overall, the results demonstrate that CSO is a valuable construct for customer segmentation and tailored communication in retailing.

Purpose – This paper aims to study the role of self-consciousness from the point of view of firm loyalty. Firms increasingly vie to gain, and then maintain, loyal consumers. A firm’s assumption that such consumers will be willing to pay premium prices, however, contradicts consumers’ rational motivations to seek low prices. This research suggests that consumers’ self-consciousness and the nature of their loyalty toward a firm help resolve this apparent contradiction. The results show that when past purchases reflect an exclusive relationship with a retailer, participants with high public self-consciousness valued relatively low-price offers, whereas those with high private self-consciousness expressed high-value perceptions for higher priced offers. However, when past purchases were divided between retail partners, self-consciousness showed no impact on value perceptions. Design/methodology/approach – Firms increasingly vie to gain, and then maintain, loyal consumers. A firm’s assumption that such consumers will be willing to pay premium prices, however, contradicts consumers’ rational motivations to seek low prices. This research suggests that consumers’ self-consciousness and the nature of their loyalty toward a firm help resolve this apparent contradiction. The results show that when past purchases reflect an exclusive relationship with a retailer, participants with high public self-consciousness valued relatively low-price offers, whereas those with high private self-consciousness expressed high-value perceptions for higher priced offers. However, when past purchases were divided between retail partners, self-consciousness showed no impact on value perceptions. Findings – Analysis reveals that consumers’ evaluations and search behaviors are influenced by characteristics of the medium (retail vs e-tail), but this effect is moderated by both gender and price knowledge. Females prefer a brick and mortar environment and are likely to seek information at such retailers even when similar products are available online. However, males evaluate online offers better than identical store offers and are less inclined to engage in channel transition. Finally, evaluations of online offers are positively related to price knowledge, whereas a reverse pattern of results is obtained for retail offers. Originality/value – The findings shed light on how consumers evaluate identical online vs retail price offers, and their associated search intentions. These findings have practical implications for merchants who adopt a dual presence.

Master of Agribusiness
Department of Agricultural Economics
Michael Boland
Greenhouse gas (GHG) emissions and their negative effect on the environment is a growing concern in the world. It is estimated that agriculture is responsible for 7% of the total GHG emissions in the United States. Currently, environmental policies to regulate GHG are in place in different countries and are expected to increase in the future. Increased awareness about climate change by customers also represents an incentive for companies in measuring their emissions. The objective of this study is to estimate carbon dioxide-equivalent emissions from eight agribusiness retailers in Kansas. Data consisted of two years of energy inputs from the operation of the agribusiness retailers. Carbon emission coefficients were employed to determine carbon dioxide-equivalent emissions associated with the use of each energy input during their operations. Results suggest that electricity is the largest source of total carbon dioxide emissions from the retail operations followed by diesel fuel. Diesel fuel represents the main source of direct emissions and gasoline represents the second largest source of direct emissions. Emissions from the agricultural sector will not be regulated under the current American Clean Energy and Security Act of 2009 but information on their potential carbon footprint may be used in identifying specific processes where emissions could be reduced and to analyze possible climate legislation implications for their operations. If agribusinesses were to be regulated, none of the eight retailers have locations with emission levels that would be subject to the current cap and trade bill passed by the U.S. House of Representatives. But, if they were regulated and had to comply by purchasing carbon credits equal to 5 to 20% of their direct emissions, the cost would be low given estimation of future carbon prices in the literature. Even if agricultural retailers are not directly restricted, they will likely be affected by increases in energy input prices if such legislation is enacted.

ABSTRACT EVALUATION OF FIT FOR 3D PRINTED RETAINERS AS COMPARED TO THERMOFORM RETAINERS By David Cole, D.M.D. A thesis submitted in partial fulfillment of the requirements for the degree of Master of Science in Dentistry at Virginia Commonwealth University Thesis Directors: Eser Tüfekçi, D.D.S., M.S., Ph.D., M.S.H.A. Professor, Department of Orthodontics Sompop Bencharit, D.D.S., M.S., Ph.D. Associate Professor and Director of Digital Dentistry, Department of General Practice Introduction: Despite recent advances in three-dimensional (3D) printing, little information is available on 3D printed retainers Methods: Three reference models were used to fabricate traditional vacuum formed, commercially-available vacuum formed, and 3D printed retainers. For each model, three retainers were made using the three methods (a total of 27 retainers). To determine the trueness, the distances between the intaglio surface of the retainers and the occlusal surface of the reference models were measured using an engineering software. A small difference was indicative of a good fit. Results: Average differences of the traditional vacuum formed retainers ranged from 0.10 to 0.20mm. The commercially-available and 3D printed retainers had a range of 0.10 to 0.30mm and 0.10 to 0.40mm, respectively. Conclusions: The traditional vacuum formed retainers showed the least amount of deviation from the original reference models while the 3D printed retainers showed the greatest deviation.

Thesis: M. Eng. in Logistics, Massachusetts Institute of Technology, Engineering Systems Division, 2015.
Cataloged from PDF version of thesis.
Includes bibliographical references (pages 70-72).
Promotions involve a complicated interplay of factors and are a result of a synchronized sequence of activities between manufacturers and retailers. The outcome of promotions pivot on several elements beyond the control of any one party in the supply chain. 'How' a promotion performed has a more straight forward answer than 'Why' a promotion performed a certain way. This research attempts to define a quantitative methodology to measure performance of promotions and reveal insights to consumer product manufacturers and retailers that will help answer the 'How' and the 'Why' of promotions. The measures used are simple, but the combination of analysis creates a complex structure of many dimensions that reveals intricate insights into the functioning of the supply chain, the most important asset in executing promotions. We present to you a three dimensional framework termed the 'Promotion Performance Cuboid' with structural elements consisting of three foundational supply chain measures, inventory, stockouts, and performance of sales against target forecasts. The measures when viewed together through the Promotion Performance Cuboid, tell a revealing story of the underlying dynamics of promotions and the elements that actually control promotional become lucid.
by Asen Kalenderski and Satya Sanivarapu.
M. Eng. in Logistics

Despite the high profile nature of the interventions made by regulators after the global financial crisis, there have been few objective assessments of their success and of the orthodoxy of market failure analysis that underpins the rationale for taking action. This study addresses both literature gaps by developing a distribution landscape segment model to measure the success of an exemplar; the Retail Distribution Review (RDR). It also undertakes exploratory research to establish a basis for a diagnostic paradigm based on customer value rather than well established, but criticised, classical economic indicators. A “stock flow” based model was constructed to assess post-RDR levels of asymmetry, agency and trust. The absence of source data prompted a second exploratory phase of research into Trust as a welfare benefit, using customer focus groups and telephone surveys. An evidential basis for an alternative framework based on what consumers value, rather than how economists think is rational for them to act, was established. The model results indicated a landscape which is more complex than 2013, with competing interests transmuted rather than eradicated and information asymmetry growing rather than shrinking. The results support a view that interventions focussing on narrow “market” definitions do not reflect the complexity of human behaviour and are simply “squeezing the balloon”. The customer value research found that trust is complicated and related to several key “motivators”. These have underlying attributes which differ between socio economic groups, the financial objectives and whether customers have advisers. The conclusion reached is that an evidence based customer perspective should be at the heart of regulatory analysis, if public welfare is to be maximised. The study provides evidence of complexities and connectedness between actors and economic forces in the retail financial services landscape, cautiously supporting the literature on regulatory interventions as socio-technical assemblages. It argues that the customer value framework enriches the regulatory toolkit by forming a guard against intellectual capture and unintended consequences of shaping reality to fit a so-called perfect market model.

Includes bibliographical references.
The South African retail industry is growing significantly and increasingly becoming an important contributor to the country's economic growth. The industry grew by 5.9 percent in 2011, in terms of sales, compared to 3.6 percent decline in 2009. According to figures provided by the Statistics South Africa (StatsSA), the industry contributed six percent to the entire South African economy and 23 percent towards total employment in the country. Despite the growing significance of the industry in the South African economy, the industry is still marred with chronic challenges of poor education and skills shortages. Major players in the industry indicated that these challenges are the main impediments to potential higher growth.

One of the greatest challenges facing South Africa and the "independent states" of Transkei, Bophuthatswana, Venda and Ciskei over the next decade will be job creation and the development of the skills of the people. This is particularly true of Ciskei with its rapid population growth, unemployment, shortage of skilled manpower and over abundance of unskilled labour. Small business and, in particular, retailing with its relatively low entry requirements, can play a significant role in the creation of jobs. Small business, and small business retailing in particular, suffers, however, from a high failure rate resulting in a waste of financial and human resources which a developing nation like Ciskei can ill afford. The training of people involved in small business retailing is, therefore, of great importance. There is no unanimity of opinion, however, as to what training models or approaches are most appropriate. The purpose of this study was, thus, to design a training model, develop an andragogic training programme for Ciskeian small retailers based upon the model and test it. In accordance with the model developed, the nature of the retailers performance problem was established, the job of the small retailer was analysed, the training needs of retailers were identified, performance standards were set, the course curriculum was developed, training strategies and styles were selected, the necessary training resources were obtained and the training programme was implemented. A pilot training programme was run in 1987 and then the amended programme was run for two years. The results of the training were measured in terms of: -the delegates reaction to the training programme -what the delegates learnt -changes in the business as perceived by regular customers -reaction of the delegates to the training programme one year later -case studies and survival rates Statistically significant positive results were obtained in all aspects evaluated. It can, therefore, be concluded that the andragogic training model for Ciskeian retailers resulted in a positive reaction of delegates to the training, an improvement in the retailer's knowledge of retailing, positive changes in the businesses as perceived by regular customer and improved survival rates of these small retail businesses.

Business Administration/Accounting
Ph.D.
I examine how managers mitigate the side effects of the overly complicated performance evaluation system in the context of a high-end retail industry. The standard performance evaluation system in the industry has evolved to include multiple performance measures. The detailed measures can incentivize employees to perform multiple performance-relevant activities, but they inevitably increase the complexity of the performance evaluation system. The complexity increases the risk of information overload of the employees, decreasing judgment quality and potentially decreasing their performance. Drawing on psychology literature, I postulate two factors moderating the relationship between information overload and performance: 1) disaggregated feedback provides detailed information on each category of performance measures and compensate for each performance measure rather than for overall performance level; 2) feedforward informs employees about how their actions affect their compensation. Both factors mitigate the negative performance effect of information overload by clarifying causality embedded in the complex performance evaluation system to employees. I conduct two field experiments that implement the disaggregated feedback and the feedforward policies for sales outlets of a high-end retail firm, respectively, and examine whether the policies mitigate information overload problem and improve performance. I find that the treatment group exhibits improvement in performance, suggesting that disaggregated feedback and the feedforward reduce information overload.
Temple University--Theses

The South African motor industry plays a pivotal role in the economy of South Africa and is a leading indicator in economic change. In general, satisfaction of customer service in the motor industry is steadily improving. However, as research has shown, there is still room for improvement within the industry. Knowing what customers expect is a critical step in delivering good quality service to ensure customer retention in the long-term (Zeithaml, Parasuraman & Berry 1990:62-63). Having a good understanding of the value of forming long-term relationships with customers and their evaluation of the quality of the service provided, cannot be underestimated, as failure to actually ask customers what they think of the service could be detrimental in the long-term. Vehicle manufacturers conduct ongoing research to monitor customer perceptions of the quality of the service provided by their vehicle retailers. The information generated from the research findings can be used by manufacturers to improve levels of service where this appears to be lacking, and deal promptly with any customer complaints. Against this background, how vehicle owners judge the quality of the service provided by a franchised vehicle retailer for a repair and maintenance service, will be crucial to understanding how customers form perceptions of service related firms specifically, and in general, even an entire industry. The primary objective of this study is to assess customer perceptions of service quality with a franchised vehicle retailer following a routine repair and maintenance service. The sample consisted of 3 859 respondents who had their vehicles serviced at a GM South Africa franchised vehicle retailer over a one month period. The empirical results of the study revealed that GM South Africa show general positive results in terms of customer service satisfaction, however, there are some areas where additional attention is required.

Novel, functional, and aesthetic products are thought to have a high likelihood of success in the marketplace. While making sound design decisions is a critical ability of good designers, evaluating product concepts for their future successes in the marketplace is a challenging task. In design classes, only about half of product concepts selected by student design teams may be retained and prototyped into final products, i.e., about half of student design teams find that their initial product concepts are difficult to make workable and change to different concepts by the time they create prototypes for testing. This paper investigates if electrophysiological concomitants in product concept evaluation may potentially be used to improve students’ and designers’ product concept evaluation processes. The preliminary data in this pilot study indicate that distinct decision-making processes may occur during evaluations of product concepts on novelty, functionality, and aesthetics, evidenced by brain activation differences among students.

1.1 Macroeconomic summary Economic recovery has consistently outperformed the technical staff’s expectations following a steep decline in activity in the second quarter of 2020. At the same time, total and core inflation rates have fallen and remain at low levels, suggesting that a significant element of the reactivation of Colombia’s economy has been related to recovery in potential GDP. This would support the technical staff’s diagnosis of weak aggregate demand and ample excess capacity. The most recently available data on 2020 growth suggests a contraction in economic activity of 6.8%, lower than estimates from January’s Monetary Policy Report (-7.2%). High-frequency indicators suggest that economic performance was significantly more dynamic than expected in January, despite mobility restrictions and quarantine measures. This has also come amid declines in total and core inflation, the latter of which was below January projections if controlling for certain relative price changes. This suggests that the unexpected strength of recent growth contains elements of demand, and that excess capacity, while significant, could be lower than previously estimated. Nevertheless, uncertainty over the measurement of excess capacity continues to be unusually high and marked both by variations in the way different economic sectors and spending components have been affected by the pandemic, and by uneven price behavior. The size of excess capacity, and in particular the evolution of the pandemic in forthcoming quarters, constitute substantial risks to the macroeconomic forecast presented in this report. Despite the unexpected strength of the recovery, the technical staff continues to project ample excess capacity that is expected to remain on the forecast horizon, alongside core inflation that will likely remain below the target. Domestic demand remains below 2019 levels amid unusually significant uncertainty over the size of excess capacity in the economy. High national unemployment (14.6% for February 2021) reflects a loose labor market, while observed total and core inflation continue to be below 2%. Inflationary pressures from the exchange rate are expected to continue to be low, with relatively little pass-through on inflation. This would be compatible with a negative output gap. Excess productive capacity and the expectation of core inflation below the 3% target on the forecast horizon provide a basis for an expansive monetary policy posture. The technical staff’s assessment of certain shocks and their expected effects on the economy, as well as the presence of several sources of uncertainty and related assumptions about their potential macroeconomic impacts, remain a feature of this report. The coronavirus pandemic, in particular, continues to affect the public health environment, and the reopening of Colombia’s economy remains incomplete. The technical staff’s assessment is that the COVID-19 shock has affected both aggregate demand and supply, but that the impact on demand has been deeper and more persistent. Given this persistence, the central forecast accounts for a gradual tightening of the output gap in the absence of new waves of contagion, and as vaccination campaigns progress. The central forecast continues to include an expected increase of total and core inflation rates in the second quarter of 2021, alongside the lapse of the temporary price relief measures put in place in 2020. Additional COVID-19 outbreaks (of uncertain duration and intensity) represent a significant risk factor that could affect these projections. Additionally, the forecast continues to include an upward trend in sovereign risk premiums, reflected by higher levels of public debt that in the wake of the pandemic are likely to persist on the forecast horizon, even in the context of a fiscal adjustment. At the same time, the projection accounts for the shortterm effects on private domestic demand from a fiscal adjustment along the lines of the one currently being proposed by the national government. This would be compatible with a gradual recovery of private domestic demand in 2022. The size and characteristics of the fiscal adjustment that is ultimately implemented, as well as the corresponding market response, represent another source of forecast uncertainty. Newly available information offers evidence of the potential for significant changes to the macroeconomic scenario, though without altering the general diagnosis described above. The most recent data on inflation, growth, fiscal policy, and international financial conditions suggests a more dynamic economy than previously expected. However, a third wave of the pandemic has delayed the re-opening of Colombia’s economy and brought with it a deceleration in economic activity. Detailed descriptions of these considerations and subsequent changes to the macroeconomic forecast are presented below. The expected annual decline in GDP (-0.3%) in the first quarter of 2021 appears to have been less pronounced than projected in January (-4.8%). Partial closures in January to address a second wave of COVID-19 appear to have had a less significant negative impact on the economy than previously estimated. This is reflected in figures related to mobility, energy demand, industry and retail sales, foreign trade, commercial transactions from selected banks, and the national statistics agency’s (DANE) economic tracking indicator (ISE). Output is now expected to have declined annually in the first quarter by 0.3%. Private consumption likely continued to recover, registering levels somewhat above those from the previous year, while public consumption likely increased significantly. While a recovery in investment in both housing and in other buildings and structures is expected, overall investment levels in this case likely continued to be low, and gross fixed capital formation is expected to continue to show significant annual declines. Imports likely recovered to again outpace exports, though both are expected to register significant annual declines. Economic activity that outpaced projections, an increase in oil prices and other export products, and an expected increase in public spending this year account for the upward revision to the 2021 growth forecast (from 4.6% with a range between 2% and 6% in January, to 6.0% with a range between 3% and 7% in April). As a result, the output gap is expected to be smaller and to tighten more rapidly than projected in the previous report, though it is still expected to remain in negative territory on the forecast horizon. Wide forecast intervals reflect the fact that the future evolution of the COVID-19 pandemic remains a significant source of uncertainty on these projections. The delay in the recovery of economic activity as a result of the resurgence of COVID-19 in the first quarter appears to have been less significant than projected in the January report. The central forecast scenario expects this improved performance to continue in 2021 alongside increased consumer and business confidence. Low real interest rates and an active credit supply would also support this dynamic, and the overall conditions would be expected to spur a recovery in consumption and investment. Increased growth in public spending and public works based on the national government’s spending plan (Plan Financiero del Gobierno) are other factors to consider. Additionally, an expected recovery in global demand and higher projected prices for oil and coffee would further contribute to improved external revenues and would favor investment, in particular in the oil sector. Given the above, the technical staff’s 2021 growth forecast has been revised upward from 4.6% in January (range from 2% to 6%) to 6.0% in April (range from 3% to 7%). These projections account for the potential for the third wave of COVID-19 to have a larger and more persistent effect on the economy than the previous wave, while also supposing that there will not be any additional significant waves of the pandemic and that mobility restrictions will be relaxed as a result. Economic growth in 2022 is expected to be 3%, with a range between 1% and 5%. This figure would be lower than projected in the January report (3.6% with a range between 2% and 6%), due to a higher base of comparison given the upward revision to expected GDP in 2021. This forecast also takes into account the likely effects on private demand of a fiscal adjustment of the size currently being proposed by the national government, and which would come into effect in 2022. Excess in productive capacity is now expected to be lower than estimated in January but continues to be significant and affected by high levels of uncertainty, as reflected in the wide forecast intervals. The possibility of new waves of the virus (of uncertain intensity and duration) represents a significant downward risk to projected GDP growth, and is signaled by the lower limits of the ranges provided in this report. Inflation (1.51%) and inflation excluding food and regulated items (0.94%) declined in March compared to December, continuing below the 3% target. The decline in inflation in this period was below projections, explained in large part by unanticipated increases in the costs of certain foods (3.92%) and regulated items (1.52%). An increase in international food and shipping prices, increased foreign demand for beef, and specific upward pressures on perishable food supplies appear to explain a lower-than-expected deceleration in the consumer price index (CPI) for foods. An unexpected increase in regulated items prices came amid unanticipated increases in international fuel prices, on some utilities rates, and for regulated education prices. The decline in annual inflation excluding food and regulated items between December and March was in line with projections from January, though this included downward pressure from a significant reduction in telecommunications rates due to the imminent entry of a new operator. When controlling for the effects of this relative price change, inflation excluding food and regulated items exceeds levels forecast in the previous report. Within this indicator of core inflation, the CPI for goods (1.05%) accelerated due to a reversion of the effects of the VAT-free day in November, which was largely accounted for in February, and possibly by the transmission of a recent depreciation of the peso on domestic prices for certain items (electric and household appliances). For their part, services prices decelerated and showed the lowest rate of annual growth (0.89%) among the large consumer baskets in the CPI. Within the services basket, the annual change in rental prices continued to decline, while those services that continue to experience the most significant restrictions on returning to normal operations (tourism, cinemas, nightlife, etc.) continued to register significant price declines. As previously mentioned, telephone rates also fell significantly due to increased competition in the market. Total inflation is expected to continue to be affected by ample excesses in productive capacity for the remainder of 2021 and 2022, though less so than projected in January. As a result, convergence to the inflation target is now expected to be somewhat faster than estimated in the previous report, assuming the absence of significant additional outbreaks of COVID-19. The technical staff’s year-end inflation projections for 2021 and 2022 have increased, suggesting figures around 3% due largely to variation in food and regulated items prices. The projection for inflation excluding food and regulated items also increased, but remains below 3%. Price relief measures on indirect taxes implemented in 2020 are expected to lapse in the second quarter of 2021, generating a one-off effect on prices and temporarily affecting inflation excluding food and regulated items. However, indexation to low levels of past inflation, weak demand, and ample excess productive capacity are expected to keep core inflation below the target, near 2.3% at the end of 2021 (previously 2.1%). The reversion in 2021 of the effects of some price relief measures on utility rates from 2020 should lead to an increase in the CPI for regulated items in the second half of this year. Annual price changes are now expected to be higher than estimated in the January report due to an increased expected path for fuel prices and unanticipated increases in regulated education prices. The projection for the CPI for foods has increased compared to the previous report, taking into account certain factors that were not anticipated in January (a less favorable agricultural cycle, increased pressure from international prices, and transport costs). Given the above, year-end annual inflation for 2021 and 2022 is now expected to be 3% and 2.8%, respectively, which would be above projections from January (2.3% and 2,7%). For its part, expected inflation based on analyst surveys suggests year-end inflation in 2021 and 2022 of 2.8% and 3.1%, respectively. There remains significant uncertainty surrounding the inflation forecasts included in this report due to several factors: 1) the evolution of the pandemic; 2) the difficulty in evaluating the size and persistence of excess productive capacity; 3) the timing and manner in which price relief measures will lapse; and 4) the future behavior of food prices. Projected 2021 growth in foreign demand (4.4% to 5.2%) and the supposed average oil price (USD 53 to USD 61 per Brent benchmark barrel) were both revised upward. An increase in long-term international interest rates has been reflected in a depreciation of the peso and could result in relatively tighter external financial conditions for emerging market economies, including Colombia. Average growth among Colombia’s trade partners was greater than expected in the fourth quarter of 2020. This, together with a sizable fiscal stimulus approved in the United States and the onset of a massive global vaccination campaign, largely explains the projected increase in foreign demand growth in 2021. The resilience of the goods market in the face of global crisis and an expected normalization in international trade are additional factors. These considerations and the expected continuation of a gradual reduction of mobility restrictions abroad suggest that Colombia’s trade partners could grow on average by 5.2% in 2021 and around 3.4% in 2022. The improved prospects for global economic growth have led to an increase in current and expected oil prices. Production interruptions due to a heavy winter, reduced inventories, and increased supply restrictions instituted by producing countries have also contributed to the increase. Meanwhile, market forecasts and recent Federal Reserve pronouncements suggest that the benchmark interest rate in the U.S. will remain stable for the next two years. Nevertheless, a significant increase in public spending in the country has fostered expectations for greater growth and inflation, as well as increased uncertainty over the moment in which a normalization of monetary policy might begin. This has been reflected in an increase in long-term interest rates. In this context, emerging market economies in the region, including Colombia, have registered increases in sovereign risk premiums and long-term domestic interest rates, and a depreciation of local currencies against the dollar. Recent outbreaks of COVID-19 in several of these economies; limits on vaccine supply and the slow pace of immunization campaigns in some countries; a significant increase in public debt; and tensions between the United States and China, among other factors, all add to a high level of uncertainty surrounding interest rate spreads, external financing conditions, and the future performance of risk premiums. The impact that this environment could have on the exchange rate and on domestic financing conditions represent risks to the macroeconomic and monetary policy forecasts. Domestic financial conditions continue to favor recovery in economic activity. The transmission of reductions to the policy interest rate on credit rates has been significant. The banking portfolio continues to recover amid circumstances that have affected both the supply and demand for loans, and in which some credit risks have materialized. Preferential and ordinary commercial interest rates have fallen to a similar degree as the benchmark interest rate. As is generally the case, this transmission has come at a slower pace for consumer credit rates, and has been further delayed in the case of mortgage rates. Commercial credit levels stabilized above pre-pandemic levels in March, following an increase resulting from significant liquidity requirements for businesses in the second quarter of 2020. The consumer credit portfolio continued to recover and has now surpassed February 2020 levels, though overall growth in the portfolio remains low. At the same time, portfolio projections and default indicators have increased, and credit establishment earnings have come down. Despite this, credit disbursements continue to recover and solvency indicators remain well above regulatory minimums. 1.2 Monetary policy decision In its meetings in March and April the BDBR left the benchmark interest rate unchanged at 1.75%.