Retailers Are Loading Up On Merchandise As Holiday Season Approaches
By Sam Lewis
Increases in imported cargo containers could mean big sales for retailers
Retailers across the country are gearing up for the holiday shopping season. According to the Global Monthly Port Tracker report, issued on September 9 by NRF and Hackett Associates, container imports by major retailers are expected to grow more than 5 percent in September, against statistics from the same time last year.
Cargo import data is not always a direct correlation with retail sales, or employment for that matter, as it is strictly a count of containers, not an evaluation of what is inside it. “The U.S. economy is on the road to sustained growth,” Hackett Associates Founder Ben Hackett said. “Second-quarter GDP was well above expectations and surprised most forecasters, the unemployment picture is improving, and we believe consumer confidence will translate into increased sales during the fourth quarter.”
However, the number of imported containers gives a rough measure of expectations for retailers. “Retailers are making up for the slow imports seen earlier in the year,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “It’s too early to predict holiday sales, but merchants are clearly stocking up.”
In July, the most current available data, Global Port Tracker stated that U.S. ports processed 1.43 million units. One unit is the equivalent of one, 20-foot cargo container. This marks a 5.4 percent increase over June, and a 1.1 percent jump from July 2012. These increases follow year-over-year decreases in containers imported in three of the four preceding months.
August is estimated to contain 1.48 million units, up 4.1 percent from August 2012. September is forecasted at 1.48 million units, up 5.1 percent. October’s projection is 1.46 million units, showing 9 percent growth. November and December’s estimates are also showing gains, but only 2.2 and .07 percent, respectively. Annual estimates for imported units are at 16.2 million, showing a jump of 2.5 percent versus the year-end total of 2012.
Many retailers, like Kohl’s, Macy’s, and JC Penney, suffered losses in the second quarter leading to cutbacks in annual profit projections. The imported cargo estimates of NRF and Hackett Associates is a promising sign that the third-quarter, and the holiday shopping season, will be prosperous. It may even indicate that economic recovery is happening faster than expected.