Don Brunell | Rosy retail expectations wrap up 2022 while issues remain for new year

The good news extends to online sales. E-commerce retail revenues last year were projected to grow to $554 billion compared to $360 billion in 2019, the first year of the pandemic.

Black Friday continued to be the most popular in-store day, with 114.9 million shopping followed by 63.9 million on Cyber Monday. Among those customers, 67% said they expect to head to stores, up from 64% in 2021, NFR’s surveys showed.

The Seattle Times reported one major factor is shoppers’ declining fear of COVID-19. Zachary Warring, an equity analyst at CFRA Research who focuses on consumer discretionary sales, added: “I think people will return [to physical stores] because overall people enjoy … the atmosphere of brick-and-mortar shopping. It’s almost entertainment.”

Bloomberg reports a key reason for the sales uptick was retailers offered promotions earlier than normal to reduce excess inventory. Business owners stocked up to avoid supply-chain shortages; however, fully stocked shelves and stuffed warehouses come with higher costs.  

That sales optimism was shared by the Washington Retail Association. Renée Sunde, WRA president, expected spending across our state to increase by as much as 8% during the holiday shopping season. But her optimism was tempered by increases in crime and theft.

Sunde told the Thurston County Chamber of Commerce: “Communities across the state are facing a staggering increase in theft and crime with growing concerns over safety at a time when the retail industry continues to recover from the impacts of the pandemic, the highest inflation in 40 years, retail workforce shortages, and supply chain challenges.”

“Twenty-five percent of small businesses are reporting that they had to raise prices as a result of theft within their stores, and in some cases, organized retail crime (ORC) is even creating product shortages,” Sunde added. “The threat to personal safety is also impacting the mental well-being of a lot of employees. They felt threatened. What this is resulting in is employees that are afraid to come to work.”

Bloomberg’s Olivia Rockeman wrote “early shoppers helped companies such as Macy’s avoid the worst-case scenario in the third quarter, loading up credit cards to absorb higher prices for food and household items while taking advantage of steep discounts for overstocked TVs and furniture.”

Bloomberg reported more than three-quarters of customers expected to shop as much as or more than in 2021; however, some consumers were relying more on credit and buy-now, pay-later options than they did a year ago. That was causing a drop-off in the savings rate.

As we face shaky economic times, that trend could be a huge problem in 2023.

Don C. Brunell is a business analyst, writer, and columnist. He retired as president of the Association of Washington Business and lives in Vancouver. He can be contacted at theBrunells@msn.com.