The National Retail
Federation (NRF) released its annual forecast for the 2012 holiday season and
it’s not quite as promising as many had hoped. The good news is that the
association expects US retail sales to increase 4.1% across all channels to
$586.1bn. The bad news is that this is much slower growth compared to 2011 at
5.6% and 2010 at 5.5%.
According to the NRF,
consumers are expected to hold back on spending due to mixed economic data and the
uncertainty over whether lawmakers will be able to avoid implementing the
“fiscal cliff” of across the board spending cuts that are scheduled to go into
effect January 2 as well as tax increases for all income groups.
One bright spot in
the retail sector continues to be ecommerce. Of the $586.1bn expected in total
retail sales, $96bn is expected to be generated via ecommerce. In fact, NRF’s
Shop.org estimates ecommerce will grow 12% for the 2012 holiday season. This
will particularly benefit not only UPS and FedEx but also the USPS and regional
small parcel providers.
The slower overall
forecasted retail growth is in line with the Stifel Nicolaus/Transport
Intelligence Logistics Confidence Index. During September, survey respondents
were asked about peak season. About 43% of respondents expect an increase in
volumes for the peak season while an equal percentage indicated an increase
will not take place.
Expectations from
transportation providers remain muted despite the current industry optimism of
the September/October release of the Apple iPhone and other high tech gadgets.
It appears this potential “bump” in air cargo will be short-lived if the
forecasts and expectations of the holiday season hold true.
Still, US ocean
imports remain strong particularly for the US East Coast ports with Ports of
Charleston, Savannah and Virginia all reporting double digit import tonnage. Perhaps
this will bode well over the coming months for not only rail and intermodal but
also for the truck providers.
However, the fact remains
that “uncertainty” continues to hold the US economy hostage. As a result,
consumer spending remains weak, unemployment remains high and the national debt
continues to grow. The need for decisive action is greatly needed and is overdue
- a clear plan of action to erase the uncertainty needs to be implemented or
else the US economy will face a similar situation as that of Europe.
