July/August Retail Sales
On August 17th, 2022, the U.S. Commerce Department reported that retail purchases were flat in July 2022, after having risen 0.8% in June. At the same time, sales fell 0.5% at department stores and 0.6% at clothing stores. The report also indicated, with the exclusion of autos and auto part sales, retail sales actually rose 0.4% in July. Economists expected to see an increase in July retail sales.
Cargo Volumes Slowing
On August 1, 2022, the National Retail Federation (NRF) reported that imports at major U.S. container ports are expected to slow significantly for the remainder of the year. Johnathan Gold, NRF Vice President for Supply Chain and Customs Policy, stated, “Retail sales are still growing, but the economy is slowing down and that is reflected in cargo imports. Lower volumes may help ease congestion at some ports, but others are still seeing backups, and global supply chain challenges are far from over. The biggest concern for potential disruption remains the separate labor negotiations at the West Coast ports and the freight railroads, as both negotiations are critical to the approaching holiday season.”
Other experts also expect the slowing of imports at the nation’s major container ports following a record-setting spring but 2022 is still expected to realize a net gain over 2021. Industry expert, Ben Hacket, stated, “The heady days of growth in imports are quickly receding. The outlook is for a decline in volume compared with 2021 over the next few months, and the decline is expected to deepen in 2023.”
Industrial Warehouse Space – California
Amazon had a negative earnings report for the first time in seven years and has changed its course after facing a net loss of $5.9 billion in the first half of 2022. Amazon increased warehouse leased space for their delivery operations, which jumped to 379 million square feet since March 2020 and up by 214 million square feet as of May 2022. The question remains on whether Amazon will relinquish leased warehouse space or sublease 10-30 million square feet of space, more than likely at a profit, as the cost to lease warehouse space has increased.
Please contact your Western Overseas representative with any questions.