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September retail sales numbers are mixed according to Commerce and NRF data

By Jeff Berman, Group News Editor
October 29, 2013

Retail sales for the month of September released today by the United States Department of Commerce and the National Retail Federation (NRF) were mixed.

Commerce reported that September retail sales at $425.9 billion were down 0.1 percent compared to August and up 3.2 percent compared to September 2012. Total retail sales from July through September are up 4.5 percent annually.

The NRF reported that September retail sales, which exclude autos, gas stations, and restaurants, were up 0.6 percent on a seasonally-adjusted basis from August and were up 3.8 percent on an unadjusted basis annually.

“Falling gas prices combined with rising housing and stock prices continue to support consumer spending, and the broader economy,” NRF Chief Economist Jack Kleinhenz said in a statement. “While far from robust, consumers are shopping, but they are spending both discriminately and moderately. Volatility still persists in various retail sectors but spending has somewhat stabilized heading into the all-important holiday shopping season.”

As previously reported, with retail sales growth modest at best, there still remains a mixed bag of signals and headwinds on the economic front, including a slightly declining unemployment rate, improving consumer confidence data, as well as encouraging automotive sales and housing data.
These things continue to occur, though, against the backdrop of sluggish GDP growth and general uncertainty regarding the economy.

At last week’s Council of Supply Chain Management’s Annual Conference in Denver, many shippers and carriers were optimistic about fourth quarter retail sales, spurred on in large part by increasing e-commerce activity. Shippers told LM they are allocating inventory and watching inventory levels with a watchful eye and careful planning in advance of holiday shopping, when it kicks off in earnest in the coming weeks.

IHS Global Insight economist Chris G. Christopher, Jr. explained in a research note that that retail sales in recent months have been a story of fits and starts, which he said are “indicative of a very cautious consumer that faces strong headwinds, including shaky consumer confidence.”

However, Christopher was not as optimistic as some CSCMP attendees for this year’s holiday shopping season.

“This is a good report. However, there has been a tremendous loss of consumer confidence in October due to political bickering over the debt ceiling and the government shutdown,” he wrote. “This does not bode well for holiday retail sales since confidence is a key ingredient to the holiday shopping season. We expect holiday retail sales to increase 3.4 percent over last year. However, last year was not particularly strong due to Hurricane Sandy, a school shooting in Connecticut, and fiscal cliff fears that put a damper on discretionary spending during the holiday shopping season.”

While sentiment may be mixed about retail sales’ prospects in the coming months, FedEx and UPS both noted they expect an incredibly busy holiday shopping season in the form of increased volumes, driven largely by e-commerce.

UPS said that it expects to pick up more than 34 million packages on Monday, December 16, which will represent its single busiest day of the year.  And with 26 shopping days between Thanksgiving and Christmas, which is six less days than in 2012, UPS said the 2013 holiday shopping season will be the most “compressed” one since 2002, with peak season daily volume expected to rise 8 percent this year.

Memphis-based FedEx expects Cyber Monday December 2 to be the busiest day in its entire history, calling for more than 22 million shipments to be delivered globally, representing an 11 percent annual gain, due in large part to online retailers leveraging the company’s FedEx Ground and FedEx Smart Post (its “last mile” delivery service partnership with the United States Postal Service, which is primarily spurred by e-commerce) networks.

And during the week of December 1-7, the company’s busiest week of the year, FedEx said it expects more than 85 million shipments to move through its global networks, marking a 13 percent gain over the same period last year.

The most recent edition of the Port Tracker report from the NRF and Hackett Associates is calling for volumes in October (which is typically the busiest month of the year) at United States-based retail container ports to increase 9.1 percent annually in October, which the report reflects goods ordered months in advance of the government shutdown, with retailers gearing up for holiday shopping activity.

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).


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