China: More robust than expected
The 15th Singles Day Festival, also known as "Double 11", recently came to an end in China. Initial calculations of the sales figures are more robust than expected. A total of RMB 1'138.6 billion worth of goods were sold between October 31 and November 11. This currently corresponds to around CHF 143.5 billion and growth of around 2.1% compared to the previous year.
It was striking that the motto of the e-commerce platforms on this year's Singles Day was "Low prices" or "Really cheap". In the current economic situation, which is characterized by a structural slowdown in growth and increasing consumer restraint, the search for a very attractive offer seems to be gaining in importance. This is reflected in the fact that although parcel deliveries have increased by 23% year-on-year in the same period, the value per order is lower due to high discounts. The focus on lower prices and everyday consumer categories will continue to put pressure on the margins of manufacturers and retailers.
Lower growth than 2022
The National Retail Federation (NRF) is forecasting sales growth of around 3 to 4% this year. This corresponds to the annual average between 2010 and 2019. However, growth is significantly lower compared to the record years of 2020 to 2022. The trend is similar to 2022, when sales growth of 5.4% was significantly below the 2021 figure of 12.7%, but above the pre-coronavirus level. In view of the current US inflation rate of 3.2%, the forecast sales growth is not significantly higher. This year, an average of around USD 875 will be spent on gifts, decorations, food and other Christmas-related purchases - slightly more than in the past ten years.
In addition, the warm and humid weather so far is dampening the mood in the retail sector. This is forcing retailers to offer higher discounts on winter clothing in order to avoid overstocking. Lower demand for winter clothing and accessories could exacerbate an already difficult Christmas season due to uncertain consumer spending.
Fewer seasonal workers in the retail trade in the USA
US retailers are planning to hire around 553'000 seasonal workers this season, according to data from the industry newspaper "Retail Dive". This corresponds to a decrease of almost 46'000 compared to the previous year and around 140'000 compared to 2021. The decline in seasonal workers primarily affects brick-and-mortar retailers in the USA. In contrast, Amazon plans to hire 250'000 seasonal workers, which corresponds to an increase of 66.6% compared to the previous year.
Number of seasonal employees at US retailers since 2019