HdL HeadLines calls out retail trends affecting the economy and HdL news to provide you with insight and support in your budget preparation and economic planning.
- Amazon’s Year Could Be Weighed Down by Oil Prices, Stimulus End
- The Pandemic Was Supposed to Push All Shopping Online. It Didn’t.
- Retail Sales Rise 0.5% in March Amid Soaring Inflation
- Here’s What Consumers Plan to Cut Back on if Prices Continue to Surge
- U.S. Auto Sales Fall in Q1 as Chip Shortages Slows Factories
- HdL Announcements
Amazon's operating environment has become increasingly complex, with the end of stimulus payments this year and turmoil in Europe potentially weighing on revenue, and spiking oil prices adding costs, according to Rohit Kulkarni, managing director with MKM Partners. At the same time, Amazon could benefit from raising prices on Prime and a fuel surcharge on third-party sellers using its fulfillment services, Kulkarni explained in a research note. Inflation on items sold could also add revenue from Amazon's seller services.
When millions of locked-down Americans went online during the Covid-19 pandemic, it looked like the possible start of a permanent shift in consumer behavior. Just like working and watching movies at home, shopping at home was a faster, safer and easier alternative to trekking to an actual store. Companies like Amazon.com Inc., PayPal Holdings Inc., Shopify Inc. and Wayfair Inc. and others notched record profits, as their stock prices hit all-time highs in 2020 or 2021. But now E-commerce retailers that rode a surge of online purchases in 2020 are now grappling with the fact that some customers have returned to stores. (Subscription to Wall Street Journal may be required.)
Retail sales rose modestly in March, but higher prices for food, gasoline and other basics took a big share of consumers’ wallets. Retail sales increased 0.5% after registering a revised 0.8% increase from January to February, reported the U.S. Commerce Department. Spending has been fueled by wage gains, solid hiring and more money in banking accounts. January’s increase of 4.9% was the biggest jump in spending since March 2021, when American households received a final federal stimulus check of $1,400.
As inflation continues to weigh on American households, people are plotting what they’ll cut from their budgets in the coming months to keep spending in check. More than 50% of adults say they’ve already cut back on dining out and will consider reducing that further if inflation continues to surge according to a recent survey. People are also cutting back on driving and subscriptions and are even canceling vacations to keep up with inflation, the survey found.
U.S. new-vehicle sales fell about 12% in the first quarter compared with a year ago, as the global computer chip shortage continued to slow factories amid high consumer demand. Many automakers reporting sales made reference to the chip shortage, which began late last year and has continued to frustrate the industry, making it unable to satisfy strong demand from consumers. Many expect improvement during the year, especially in the second half.
Click below for our latest Insights articles:
- The 5 Ws of Increasing Gas Prices
- Sales Tax Returns in California Continue to Rebound in 4Q2021
- The Secret Life of Grants: Hidden Costs
- California Consensus Forecast
HdL will be at the following upcoming events:
- Cal Cities City Leaders Summit - May 11-13, 2022
- CCCA Annual Municipal Seminar - May 12-15, 2022
- ICSC Las Vegas - May 22-24, 2022
- MMANC Women's Leadership Summit - May 26, 2022
Subscribe to receive HdL legislative and regulatory updates, economic forecasts, industry headlines and more.