Brick-and-Mortar Growing Faster Than eCommerce As October Jobs Report Shows Surprising Strength And Holiday Sales Projections Remain Ambitious
Source: RetailGeek Jason Goldberg, Head Of Retail At Publicis
Outside of 2020, physical retail has grown more on a dollar basis than eCommerce, but now for the first time since 2008, brick-and-mortar is growing more on a percentage basis too. Now admittedly this is a comparison to Q2 of 2020 which was highly depressed, but the growth of brick-and-mortar in the graph is undeniable going from $1.2 trillion pre-pandemic to over $1.4 trillion or about 12%. That’s massive growth especially given the pandemic indicating quite the healthy recovery that continues to strengthen as the pandemic wains and we return confidently to pre-covid behaviors. For example, retailers celebrated the lifting of international travel bans. Global travelers represent over $43 billion or 27% of travel and tourism spending in the US.
With all this as a backdrop, holiday shopping is projected by experts to grow anywhere from 7-11% this year - a tremendous jump after a strong last year. Retailers that can keep products on the shelves and ship eCommerce orders on time will do VERY well this year. And of course, there is now Pfizer’s new pill for treatment for Covid that’s 89% effective in preventing hospitalization. Lots of reasons to be optimistic this week.
October jobs numbers confirmed the positive momentum. Nonfarm payrolls increased by 531,000 in October, beating the projection of 450,000 by 18%. The unemployment rate fell to 4.6%, a new pandemic low and wages rose 0.4% for the month, up 4.9% from a year ago. Job growth hasn’t been higher more because of labor supply than the number of open jobs. Retailers are ramping up for holiday sales with 1.3 million job openings as of August. That’s likely to go up.
The American Trucking Association estimates the industry is 80,000 drivers short of the workers needed to keep goods moving freely this year—up from 61,500 drivers pre-pandemic. Interestingly, the NY Post announced that 72,000 truckers are being held up by failed drug tests, which is a new take on the problem and surprisingly close number to the gap needed.
Inefficiencies in the system are causing longer wait times, which means truckers get paid less for their time, since they are paid by shipment and route length not time of pickup and drop off. In September, the average cost to hire a big rig on the “spot market,” was $2.49 per mile excluding fuel surcharges, up 14% from 2020 and the highest ever reported since 2010, according to freight marketplace DAT Solutions LLC. New fines for lingering containers and updated regulations on empty container stacking are starting to help address these issues said the Head of the Port Of Los Angeles.