RSS feed Get our RSS feed

News by Topic

BizReport : Ecommerce : March 11, 2020

Retail forecast strong but will Coronavirus slow expectations?

The NRF is predicting solid growth for retailers in 2020 but could fears about the Coronavirus slow retail sales? First, the numbers. The NRF in February estimated retail sales would increase about 4% this year to reach at least $3.9 trillion for US merchants.

by Kristina Knight

Online sales are expected to show even stronger growth, between 12% and 15% growth YoY, which would put the online portion of retail at $870 billion by year's end.

"The nation's record-long economic expansion is continuing, and consumers remain the drivers of that expansion," NRF President and CEO Matthew Shay said. "With gains in household income and wealth, lower interest rates and strong consumer confidence, we expect another healthy year ahead. There are always wild cards we cannot control like coronavirus and a politically charged election year. But when it comes to the fundamentals, our economy is sound and consumers continue to lead the way."

For 2019, retail sales showed just over 3% growth.

That, of course, was before the outbreak of cases in the US and before the stock market dip earlier this week. According to the NRF, the disruptions to the supply, especially for merchants and brands receiving goods from the Asia region could be longer than initially suspected. Their poll of merchants this month found that almost half had already seen some disruptions to their supply chain (40%) and nearly one-third (26%) say they expect to see disruptions before the virus threat wanes.

"There are still a lot of unknowns to fully determine the impact of the coronavirus on the supply chain," NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. "As factories in China continue to come back online, products are now flowing again. But there are still issues affecting cargo movement, including the availability of truck drivers to move cargo to Chinese ports. Retailers are working with both their suppliers and transportation providers to find paths forward to minimize disruption."

According to the NRF, US ports in February saw import Twenty-Foot Equivalent Units (TEUs) decrease 12% YoY and for March the TEUs are expected to see another decline, of up to 18% YoY. They say April could also see a decline in imports, but that number is much less (3% decrease) than either February or March. By May, the NRF believes much of the virus impact will have receded and import TEUs should be returning to normal levels.

"Now that we are in the coronavirus environment, uncertainty has expanded exponentially," Hackett Associates Founder Ben Hackett said. "Our projections are based on the optimistic view that by the end of March or early April some sort of normalcy will have returned to trade."

Meanwhile, the NRF has released their list of the Top 50 Global Retailers and topping the list are are American-based brands WalMart and Amazon; also in the top five are Schwartz Group, Alibaba and CostCo.

Tags: ecommerce, ecommerce trends, m:commerce, mobile commerce, National Retail Federation, retail and coronavirus, retail trends

Subscribe to BizReport



Copyright © 1999- BizReport. All rights reserved.
Republication or redistribution of BizReport content is expressly prohibited without the prior written consent.
BizReport shall not be liable for any errors in the content, or for any actions taken in reliance thereon.