Subscribe to our free, weekly email newsletter!


Logistics business: May retail sales show a slight decline

image
By Jeff Berman, Group News Editor
June 11, 2010

Unlike the previous two months, retail sales growth momentum saw a dip from April to May but saw slight year-over-year increases, according to data released by the United States Department of Commerce and the National Retail Federation.

May retail sales, which include non-general merchandise like automobiles, gasoline, and restaurants, at $362.5 billion, were down 1.2 percent from April and up 6.9 percent year-over-year, and total retail sales for the March through May 2010 period were up 8.1 percent year-over-year, according to the Department of Commerce.

And the NRF reported that May retail sales (which exclude automobiles, gas stations, and restaurants) fell 1.4 percent seasonally-adjusted from April and were up 2.7 percent unadjusted annually.

“Even though May sales were not as strong as previous months, we remain encouraged by the steady pace of the economic recovery,” said Rosalind Wells, Chief Economist for NRF, in a statement. “Ultimately consumer momentum will be tied to our economy’s ability to add private sector jobs.”

Even though retail sales are down sequentially, recent upticks in sales are not entirely surprising, considering that various economic indicators and media reports in recent weeks have pointed to some improvements in the job market, and ongoing strength in the manufacturing sector.

And at the same time, consumers have started to emerge from the bunker and begun spending more, albeit cautiously. This has also been apparent in freight transportation volumes, which are seeing consistent sequential and annual gains, due to increased consumer spending, coupled with retailers slowly building up inventories after deliberately keeping them low for months to better match up with previously sluggish demand following the depths of the recession.

Industry sources have told LM that since November the overall market feels better due to retailers putting themselves in a position to have ample spring inventory in place.

What’s more retail sales are turning in steady performances at a time when unemployment remains high, coupled with the national personal savings rate at about 5.5 percent-compared to zero in the past-which has lowered the new normal consumption rate, and will build up slowly from this point.

“By and large the trend [regarding retail sales] continues to be up,” said Eric Starks, president of freight transportation consultancy FTR Associates. “But with this choppiness from April to May, you need to look at what is happening on a three-month average basis; activity continues to move higher overall.”

At the same time, Starks said, consumers are perhaps being cautious still, with most thinking the economy is still moving in the right direction despite not having completely embraced the recovery.
And year-over-year gains tend to show what Starks described as a “false picture of the economy,” adding that these annual gains will start to disappear over the second half of this year and will not be nearly as high as what is being seen now.

“If we continue to start seeing strong year-over-year comparisons in the second half of the year, then that is a great thing and is what we would like to see,” explained Starks. “But we expect them to come down at a pretty modest pace over the next quarter or so.”

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

In the third-party logistics (3PL) sector, the ongoing trend of merger and acquisition (M&A) activity never seems to take a break. That is apparent in recent weeks alone, with XPO Logistics recent acquisition of Norbert Dentressangle for $3.53 billion, Echo Global Logistics scooping up Command Transportation for $420 million, and Kuehne+Nagel buying ReTrans for an undisclosed sum.

During this webcast attendees will learn about technology that is delivering real-time tracking on freight and putting an end to the all too common question of “Where’s My Brokered Load?”. Whether you’re a broker, 3PL, shipper, or carrier, find out how you can gain automated, TMS-integrated visibility on all your shipments.

FedEx recently took another step in its plans to acquire Netherlands-based TNT-NV and a provider of mail and courier services and the fourth largest global parcel operator for $4.8 billion, which it announced in early April. The company said it has “submitted the required filing to the European Commission to obtain regulatory clearance in connection with the intended recommended public cash offer all issued and outstanding ordinary shares in the capital of TNT Express.”

The American Trucking Associations last week praised Senator Deb Fischer (R-Neb.) for her bill that takes some positive steps towards alleviating the current environment regarding the truck driver shortage.

Global third-party logistics (3PL) services provider Kuehne+Nagel (KN) said this week it has entered into an agreement to acquire ReTrans Inc., a Memphis-based provider of multimodal transportation services.

Article Topics

News · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA