Holiday season shipments drop in December as retailers keep inventories low

Commentary on new data from Mark Delaney, FourKites’ Vice President of Industry Strategy, Retail & CPG:

“The slowdown in retail shipments is a sign of cautious consumer spending and retailers’ desire to salvage as much margin as they can by keeping inventories as low as possible. They’re walking a tight rope as they try to balance shopper demand with the hope to not have to slash prices after the holidays, kicking off what will likely be a tough year.

Retail imports from China will continue to be under pressure, as Covid, Lunar New Year and economic headwinds collide. I expect imports of durable goods to remain slow in the months ahead, while luxury and a select few categories could remain insulated from meaningful declines a bit longer."

Data for North America

• In comparison to last year, retail shipment volumes remained strong leading up to Thanksgiving for Big Box & Apparel and Grocery sub-industries for FourKites customers. Big Box & Apparel shipments in North America were up 2.9% in September and up 4.5% in October year-over-year, while Grocery shipments were up 8.3% in September and up 2.3% in October. Home & Electronics has seen decreased shipment volumes since last year, down by 4.0% and 2.6% year-over-year in September and October respectively.

• During November and December month-to-date (through December 17th), FourKites has started to see a slowdown in retail shipments compared to last year across all retail sub-industries. For Big Box & Apparel, shipment volume in North America is down by 3.5% and 2.8% year-over-year in November and December respectively, while Grocery shipments are down by 0.6% and 3.8% year-over-year over the same months. Home & Electronics has seen the biggest decrease in December so far, with month-to-date shipment volume down by 6.5% year-over-year in December so far.

Data for APAC

• From late September through November, FourKites saw a consistent decline in the retail shipments from the Asia-Pacific (APAC) region to North America, where the 28-day average shipment volume for FourKites customers decreased by 28.1% month-over-month in November. While the decline has slowed since the start of December, APAC retail shipment volumes remain low.

• Given China’s large presence in APAC retail imports, the sharp 28.1% decline in the APAC retail imports in the month of November from the previous month coupled with the high rates of delayed shipments from APAC reflect the potentially far-reaching impacts of China’s COVID policies on the global supply chain. Indeed, as of late, the 28-day average retail shipment volume from APAC to North America in December is down by 50% since the beginning of October.