This month's retail headlines covers the unlikely recession, the increase in e-commerce sales, the decline in auto sales, and more.
NRF: Recession Unlikely in 2023
The U.S. economy will likely be able to avoid a recession — and even potentially see growth — in 2023. That’s according to the National Retail Federation’s chief economist Jack Kleinhenz, who said the economy appears “more resilient than expected” in his monthly economic review for February. He added that there will still likely be economic challenges this year, such as inflation, which will likely affect different sectors of the economy at different times.
E-Commerce Sales Exceeded $1 Trillion in 2022
Online retail sales, excluding travel, surpassed $1 trillion last year “for the first time in history,” according to Comscore’s State of Digital Commerce report. While online non-travel sales totaled $1.09 trillion last year, e-commerce sales in Q4 reached its “highest quarter ever” at $332.2 billion. The top grossing digital commerce categories in 2022 were food, pet and baby goods ($219 billion), followed by apparel and accessories ($175 billion) and computers and peripherals ($117 billion), the report found.
Inside the Booming Business of Reselling Returned Merchandise
Liquidation is a growing part of retail. In 2022, Americans returned $800 billion worth of merchandise, according to the National Retail Federation. Because it’s so time and labor-intensive to sift through returns, many retailers sell them to third-party sellers: liquidators. Everyone from publicly traded companies to individuals working out of their garages play the liquidation game. And the industry is growing beyond household names like T.J. Maxx and Marshalls.
Walmart Plans Return to Growth with Sam’s Club With 30 New Stores
Sam’s Club, Walmart Inc.’s warehouse retailer, is planning 30 new US stores over the next several years after half a decade of stagnation in its commercial footprint. The retailer is expanding its store count after a sales surge fueled by the pandemic and rising inflation, which prompted shoppers to seek out lower prices and also spurred gains at Costco Wholesale Corp. and BJ’s Wholesale Club Holdings Inc. Sam’s Club has about 600 locations in the US and Puerto Rico, but it hasn’t added a traditional store in its home market since 2017.
Why Retailers Will Continue to Open Stores in 2023
According to a recent Forbes article, last year was a great year for retail real estate. By Q3, vacancy rates were down to 4.3% (one of the lowest rates in decades), driven by retail space demand and a scarcity of new development. Many new stores opened while mature brands continued to expand. Of course, the question on everyone’s mind is whether inflation and possibly recessionary influences will impact consumer demand and retail overall. However, according to Forbes, strong evidence suggests that stores and physical retail may be the key to success in 2023.
What Retailers Can Expect from Consumers This Year
The pandemic may be mitigated thanks to public health measures like vaccines, inflation may be on the wane and supply chain woes may be easing somewhat. But 2023 is nevertheless set to be defined by uncertainty, according to Michelle Evans, Euromonitor International global lead of retail and digital consumer insights. The firm released a report on the top 10 global consumer trends, a few of which will especially impact retail, Evans noted. “The number one was the evolving economic landscape,” she said.
2022 U.S. Auto Sales Fall to a Decade Low
Last year, sales of light vehicles in the United States dropped to their lowest level since 2012 amid severe supply chain snarls and tight inventories. Per Automotive News, U.S. light-vehicle sales in 2022 totaled 13.4 million units. The data takes into account the automakers that have released their sales data so far, barring a few like Mercedes-Benz, Porsche and Jaguar Land Rover that are set to report soon. In 2021, sales of U.S. light vehicles came in at 14.9 million units approximately.
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