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Welcome to a new week. We’re going to get a big piece of the puzzle to help determine the results of the 2022 holiday season when U.S. retail sales data is reported by the Commerce Department. The industry calendar is also busy with the NRF Big Show in New York and Winter Fancy Food Show in Las Vegas. Plus, Procter & Gamble's earnings call will be a bellwether for Q4.
NRF Big Show: Retailers gather in New York for the National Retail Federation’s kickoff to the year. CEOs and top leaders from Walmart, Target, Macy’s, Lowe’s, Express and Neiman Marcus will headline a host of speakers throughout keynote sessions and breakouts. Plus, an expo features innovation and technology trends coming to the industry. (Jan. 14-17)
Winter Fancy Food Show: The Specialty Food Association presents three days of discovery, sampling, trendspotting, and networking for makers, buyers, retailers, brokers, distributors, and other industry professionals in Las Vegas. (Jan. 15-17)
U.S. retail sales: The U.S. Commerce Department reports data on retail sales of all types for December. This will include a good chunk of the holiday spending, allowing analysts to combine it with November figures for a picture of the overall peak season. (Jan. 18, 8:30 a.m.)
Retail inventories: The U.S. Commerce Department releases data on inventory levels for the retail trade. This has been watched closely at a time when many retailers are looking to work out of a glut of merchandise caused by supply chain issues and forecasting. (Jan. 18, 10 a.m.)
Producer Price Index: The U.S. Commerce Department releases inflation data for December on the price of goods before they reach retail. Also known as wholesale inflation, this is considered a forward-looking measure. (Jan. 18, 8:30 a.m.)
Housing starts + Existing home sales: The U.S. Commerce Department will reveal data that is carefully monitored by the housing industry, including home retailers. (Jan. 19-20)
Tuesday, Jan. 17: Morgan Stanley, Goldman Sachs
Thursday, Jan. 19: Procter & Gamble, Netflix
Amazon layoffs are set to begin on Wednesday, Jan. 18. CEO Andy Jassy previously shared that the company will lay off 18,000 people to begin the calendar year as it seeks to cut costs. The layoffs will primarily affect the company’s commerce division, as well as people operations.
Trending in Economy
NRF's Global Port Tracker sees a slowdown in the supply chain in 2023 as retailers exercise caution.
Import volumes are expected to fall near levels not seen since the pandemic-induced economic slowdown of 2020 this winter, according to a new forecast.
February is forecast to be the slowest month for retail imports since May 2020, when factories in Asia shut down and stores closed to protect health and safety, according to the Global Port Tracker from the National Retail Federation and Hackett Associates. Only February and March 2020 saw lower numbers.
Now, retailers are importing less merchandise amid the slowing economy, elevated inflation and rising interest rates, said NRF Vice President for Supply Chain and Customs Policy Jonathan Gold.
“February is traditionally a slow month, but these are the lowest numbers we’ve seen in almost three years,” said Gold, in a statement. “Retailers are being cautious as they wait to see how the economy responds to efforts to bring inflation under control.”
NRF/Hackett Associates Global Port Tracker. (Courtesy photo)
The forecast slowdown in February comes after December import volumes of 1.73 million Twenty-Foot Equivalent Units (TEUs) were down 2.6% from November and decreased 17.1% from December 2021. January numbers have yet to be reported, but are expected to fall 17.6% year-over-year.
The slowdown is expected to continue when compared to 2022, here are the forecasts for the next four months:
- March is forecast at 1.76 million TEU, down 24.8% year over year
- April is forecast at 1.87 million TEU, down 17.3%.
- May is forecast at 1.92 million TEU, down 19.9%.
- June is forecast at 2 million TEU, which would be the first reading above 2 million since October, but still down 11.3% from the previous year.
The pullback comes after 2022 saw record import volumes as supply chains unclogged. In turn, this left many retailers with an inventory glut as multiple seasons of merchandise arrived at the same time.
While a correction is evident, experts say this isn’t a return to normal. After two years of shocks, the supply chain is once again in uncharted waters.
“In some ways, 2023 is reminiscent of 2020, when the world’s economies shut down because of the pandemic and no one had a clue where we were headed,” Hackett Associates Founder Ben Hackett said. “Cargo volumes are down, and the economy is in a contradiction of rising employment and wages that promise prosperity at the same time high inflation and rising interest rates threaten a recession. The economy is far from shut down, but the degree of uncertainty is very similar.”