Holiday retail sales are down, but online shopping is on the rise

by time news

The market didn’t like what it saw from the final holiday retail sales numbers for 2022, which set up a tough year for retailers, all while e-commerce continues to boom.

DHL freight figures show that while the core consumer market has retreated, in many categories e-commerce sales remain strong. “E-commerce continues to boom,” said Jim Monkmeyer, president of DHL Supply Chain Transportation, North America. DHL has described great growth in the field of e-commerce and the logistics company is investing heavily in this segment. “I would say the other spaces that are still growing quite fast for us are automotive and high engineering, manufacturing as well as consumer goods and high-end spirits. Food products are also doing well,” Monkmayer said.

Amid weak year-over-year holiday sales, online sales saw the biggest year-over-year increases, jumping 9.5% during the holiday season, according to National Retail Federation data released today. But Monkmayer said DHL sees a continued decline in the core retail consumer, with near-record inventories reminiscent of the pullback in markets. As a result, more retailers are cutting prices to get rid of their inventory.

In December, Scott Surdin, CEO of DHL Supply Chain, said he expected further discounting after the holiday. “I’ve never seen inventory levels like this and especially after the New Year celebrations, retailers can’t continue to sit on that inventory so the discounts they’ve been pushing will be around for a long time.” , he said. Inflation is one of the reasons behind the drop in holiday spending.

Retail sales data released today showed a 1.1% decline in December, slightly more than the 1% forecast, reflecting tepid consumer demand during the holiday shopping season. But Monkmayer is confident there will be a turnaround when inflationary pressures in the supply chain, such as freight rates, fall below peak levels of the pandemic. The latest inflation data, both the consumer price index and the producer price index, provided confirmation of easing inflation.

“I think we’ll see the tipping point sometime in the middle to late second quarter,” he said. “The cost of the containers going from $20,000 per container to $3,000 will lower costs for a lot of different products. And on top of that, fuel costs are coming down, and they’re expected to continue to come down slowly but steadily later this year. I think consumers will notice that right away, and hopefully we’ll get some of the spending back that we have seen in the last two years.”

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