This year’s BFCM sales hit record highs despite the uncertain economic landscape. Cyber Monday sales totaled $11.3 billion in sales, up 5.3 percent year-over-year. Yet, more consumers shopped online during Black Friday.
“According to the National Retail Federation (NRF), 13.2 percent more consumers shopped online during Black Friday than Cyber Monday.”
In-store foot traffic made a strong resurgence with a 17 percent increase year-over-year. While online shoppers increased at a 1.6 percent increase year-over-year. During the 5-day period, consumers spent 8 percent more than in 2021.
Matt Shay, President of the National Retail Federation, said in a press call, 83% of consumers are concerned about inflation. But, the concern doesn’t always line up with action, and right now, those concerns are not reflected in consumer spending.
It’s important to note that these sales figures are not adjusted for inflation. October’s consumer price index (CPI) of all items reading sat at 7.7 percent increase in prices over the last 12 months.
“If inflation is up 8 percent and sales are up 5 percent or so, people are definitely buying less — there’s no question about that,” – Forrest Analyst, Sucharita Kodali.
Shopify reported record sales from Thanksgiving day through Cyber Monday. $7.5 billion was spent on the platform globally, up 19 percent year-over-year.
The industrial real estate and warehousing sector remains tight at an approximately 3 percent national vacancy rate, according to research from CBRE and Cushman & Wakefield. Savannah and Central Valley markets lead all markets year-to-date in growth rate. Followed by Central Valley, California and Charleston, South Carolina. Chicago and Dallas-Ft. Worth led all markets in year-to-date absorption followed by Houston and Phoenix.
Fortunately, industrial vacancy rates expect to open up to 4 to 5 percent in 2023. This will provide temporary relief for shippers looking to secure supplemental network capacity.
Storage pricing across the United States continues to climb, up 6.4 percent in November compared to October. At a high-level, the index appeared to show warehouse storage pricing easing in Q3 2022. But, November’s reading indicates a slight uptick. This is does not come as a surprise as network partners impose general rate increases due to rising costs and inflationary pressures.
It’s also important to note that any reading above 1.0 indicates pricing is above the January 2021 baseline. We expect pricing of warehouse storage and handling costs to continue to increase heading into 2023.
The RSM US Middle Market Business Index provides a leading measure on the performance of businesses that make up the heart and soul of our country’s economy. A reading above 100 for the MMBI indicates that the middle market is generally expanding; below 100 indicates that it is generally contracting. The distance from 100 is indicative of the strength of the expansion or contraction.
The Q4-2022 MMBI reading indicates deteriorating business conditions. The index declined by 12.5 points to 124.2 from 136.7 in the previous quarter. Of the 408 respondents, 49 percent said the economy has worsened in the fourth quarter, and 41 percent expect deteriorating conditions over the next 6 months. It’s becoming clear that 2 years of rising costs and fed funds rate increases are taking a toll on the middle market economy.
Of all respondents, 47 percent plan to stockpile inventory over the next 6 months, down from 54 percent in the previous quarter. It appears that just-in-case (JIC) inventory models are not sustainable for middle-market businesses.
WarehouseQuote is a managed warehousing solution helping middle market and enterprise businesses scale their warehouse operations with precision. Through our 3PL warehousing and fulfillment network of 250+ facilities, integrated technology platform, and in-house supply chain expertise, we enable businesses to design efficient fulfillment networks connected by a single technology platform. Hundreds of B2B and B2C businesses like Chatime, Joyride, Benitago Group, Big Ass Fans, and Mighty Good Solutions use WarehouseQuote to scale, streamline, and optimize their warehouse operations.