According to the MasterCard SpendingPulse report released by MasterCard on December 26, during the holiday season from November 1 to December 24, retail sales in the United States increased by 8.5% compared with the same period in 2020, the largest increase in 17 years. Compared with that before the epidemic in 2019, the sales jumped by nearly 11%.
Data show that the epidemic has changed Americans’ consumption habits. Although the Omicron strain has landed in the United States, the American people did not choose to reduce spending, but made more online consumption, and online sales surged by more than 60% compared with before the epidemic. At the same time, more consumers returned to physical stores for consumption. Compared with 2020, Americans’ offline consumption increased by 8.1% and 2.4% compared with 2019.
According to the analysis of the report, the sharp increase in sales is partly due to the overall rise in prices. In November, the US inflation rate jumped to the highest level in nearly 40 years, and the consumer price index (CPI) increased by 6.8% compared with a year ago. But higher prices did not weaken demand, in part because American households accumulated a lot of savings during the epidemic.
Peter Berezin, chief global strategist of BCA research, an investment consulting firm, previously told China business that the final demand of the United States will remain strong in the foreseeable future. American households now have $2.3 trillion in excess savings, equivalent to 15% of annual consumption.
“The household deleveraging cycle has ended. Credit card consumption experienced a sharp decline at the beginning of the epidemic, but is now recovering. Banks are also making full efforts to issue consumer loans. Since the outbreak of the epidemic, the proportion of household net assets in China’s gross domestic product (GDP) has risen to more than 100%. Considering only the wealth effect, annual consumer spending can also be greatly boosted.” Berekin said.
the supply chain is tight, and Americans start early
The tension of the supply chain is clearly written on the shelves of American supermarkets. According to US media reports, some goods are out of stock even throughout the holiday season, such as Sony’s Playstation video game console and moose’s magic mixies magic stove.
In order to share the pressure of the supply chain, some retailers launched holiday promotions as early as October. People’s concern about commodity shortage also led to the early opening of holiday shopping season. FedEx and UPS said consumers started and completed online shopping earlier than in previous years. This helps to disperse the transportation volume and relieve the pressure on the logistics network.
Steve sadove, a senior adviser to MasterCard, said that many Americans completed Christmas shopping ahead of schedule this year. “Shoppers are eager to ensure that gifts are available before the retail peak. The tension created by supply chain and labor supply problems has led consumers to surf the Internet and shop earlier,” he said
According to US media reports, major logistics companies have increased their processing capacity for the Christmas season. FedEx added 14.4 million square feet (about 1.338 million square meters) of sorting capacity. UPS said it could sort 130000 more packages per hour in this peak season compared with last year. Therefore, the delay of commodity transportation is not as serious as people think. Most consumers receive the ordered gifts on time.
According to the data of shipmatrix, a parcel analysis company, the punctuality rates of FedEx, ups and USPS were not affected by the peak season, and even increased near Christmas. From December 12 to December 21, FedEx’s punctuality rate was 91.2%, UPS 97.1% and USPS 96.9%, all up from the previous week.
“Most of Santa’s gifts will be delivered (on time) to consumers,” Fred Smith, chairman and CEO of FedEx, said last week. “We think this peak season is very good.”
online consumption has become a habit
The epidemic has accelerated the transformation of American consumers’ consumption habits to e-commerce.
According to MasterCard’s report, the sales created by Americans through e-commerce increased by 11% year-on-year, and this figure increased by 61% compared with 2019. This year, online sales accounted for nearly one-fifth (20.9%) of the total retail sales in the United States, compared with 14.6% in 2019.
A survey conducted by 451 research, an information technology research company, before the holiday season found that about one in five respondents said that most of their offline shopping had been transferred to the Internet due to the epidemic. Another third of respondents said that at least part of their shopping was transferred to online shopping. The survey by Goldman Sachs research also shows that the epidemic has accelerated the change of people’s online shopping behavior, and this trend shows no sign of stopping. This year, consumers still prefer online shopping. 43% of consumers surveyed plan to spend more money online than last year.
Wan song, head of dhlink Business Department of dunhuang.com, a cross-border e-commerce, told the first financial reporter that the epidemic “educated” some European and American consumers who had no online shopping habits and made them “new buyers”. “This will continue forever, which is tantamount to cultivating some new consumption habits. The impact of this consumption habit on people and the people in Europe and America will be far-reaching.” He said.
According to the recent prediction of emarketer, a market research institution, the sales of e-commerce in the United States will exceed $1 trillion for the first time next year. Between 2019 and 2020, e-commerce sales increased by 32.4%. The growth rate is expected to decline to 16.1% between 2020 and 2021, but will remain near that level for the next two years.
“People’s consumption patterns have changed, which is unlikely to disappear in the short term,” said Gregory DACO, chief American economist at the Oxford Institute of economics. “We are still in an environment full of epidemic fear and uncertainty, which will continue to shape people’s buying habits.”
Industry analysts said that during the epidemic period, due to the logistics challenges caused by labor shortage, some large e-commerce retailers spent a lot of money on the construction of supply chain, which will be rewarded in the future. Tuna amobi, a media and entertainment analyst at research firm CFRA, for example, said that Amazon’s prime user base showed no signs of slowing down. Amazon bundled higher quality transportation and exclusive goods in the service. Amazon has more than 200 million prime members this year, compared with 150 million in 2020.
In addition, the report said that jewelry and electronic products and other market segments continued to grow, jewelry sales surged 32% over 2020, and electronic products sales rose 16.2%. Clothing sales increased by 47% year-on-year and 29% over 2019. The performance of department stores has also begun to rebound, with sales increasing by 21% over 2020.
“People don’t just stay at home in sweatpants,” Sedov said. “They’re going back to the mall.”
(First Finance)
