In the QAD Precision News Round-Up: 10 July 2020, UK applies for
NI border posts; H&M to close 170 stores; Brooks Brothers files
for Chapter 11; LMI reports strong logistics growth; EU expects 8.3%
contraction in 2020; plus auto e-commerce growth and more.
The UK government has submitted requests to the EU for Border Control
Posts (BCPs) at Northern Ireland’s ports to check animals and food
arriving in the EU single market. Following the end of the Brexit
transition period on January 1, 2021, Northern Ireland will remain in
the EU single market for goods while the rest of the UK will not.
Therefore, some goods entering Northern Ireland from the UK will
require checks. For more information on this news item, please see BBC News.
This week, the European Commission cut its 2020 and 2021 projections
as the Covid-19 pandemic continues to affect the 27 member states.
In 2020, the Commission expects the EU to contract by 8.3 percent,
before recovering by 5.8 percent in 2021. Consequently, this latest
forecast downgrades earlier predictions. In May, the Brussels-based
institution forecasted a 7.4 percent contraction this year, followed
by a rebound of 6.1 percent in 2021. According to the latest
forecasts, the Italian economy is forecast to contract the most among
all EU members, by 11.2 percent this year. You will find additional
details on this story at CNBC.
According to the June analysis from Logistics Managers’ Index (LMI),
the logistics industry is experiencing growth levels not seen since
2018. The LMI score for June 2020 was 61.7, an increase of more than
10 points from April’s record low. LMI calculates the score using a
variety of industry growth metrics. These include warehousing
capacity; inventory levels and costs; transportation capacity; as well
as utilization and prices. For more information, please see Supply
H&M has announced plans to permanently shut down 170 of its 5,000
stores across the globe. The retailer is accelerating its closing
strategy in response to the coronavirus outbreak. In its Q2 report to
investors, H&M Group said that it had upped its previous closure
plans by around 40 as a result of the Covid-19 lockdowns across key
markets. Furthermore, according to a H&M spokesperson, store
closures will be across all of the H&M groups seven brands which
include Weekday, Cos and Arket. For more details, please see Retail Gazette.
It has been a turbulent week for retail brands. On Wednesday, luxury
apparel retailer Brooks Brothers filed for chapter 11 bankruptcy
protection. The retailer hopes that this will help it survive the twin
blows of the retail industry's digital transformation and Covid-19
pandemic. Nevertheless, the company joins an ever-increasing list of
retailers that have filed for bankruptcy since the coronavirus
outbreak which has caused the temporary shutdown of non-essential
retail stores. Other retailers who have recently filed for bankruptcy
include JCPenney, Neiman Marcus and J. Crew. For more details, please
see USA Today.
Amazon has announced plans to open a new 825,000 square-foot
fulfillment center in Little Rock, Arkansas in 2021, creating
approximately 1,000 new full-time jobs. In the new facility, Amazon
employees will work together with Amazon robotics to pick, pack and
ship small items to customers. Additionally, Amazon is also planning
the launch of a new 85,000 square-foot delivery station in late 2020
for last mile order fulfillment. For more information, please see eSellerCafe.
According to UK carrier ParcelHero, demand for home deliveries has
become constant amid the Covid-19 pandemic and will replace seasonal
peaks. ParcelHero Head of Consumer Research David Jinks stated that
despite the re-opening of UK non-essential stores on June 15, parcel
deliveries and e-commerce sales have continued to increase.
Furthermore, Jinks stated that IMRG/Capgemini found that e-commerce
and multichannel retailers in the UK experienced recorded online
growth during the week when non-essential retailers reopened. For more
information, please see Post
Even before the impact of the global coronavirus pandemic, the
automotive industry had been facing significant disruption in the past
few years. These include electric vehicle start-ups, changes in
regulations, globalisation and the tendency for consumers to replace
car parts instead of purchasing new vehicles.
Electric vehicle (EV) technology — and the increasing consumer
adoption of greener alternatives — has begun to make serious inroads
into the automotive market. The biggest name here is, unsurprisingly,
Tesla. In June and early July, Tesla’s stock soared and the EV maker
is now the most valuable car manufacturer in the world.
Nonetheless, seemingly unassailable car manufacturing giants have
been facing more threats to their business in addition to relative
newcomers dominating the EV space. Consumers are keeping their cars on
the road longer — and that was the case even before Covid-19 shut down
showrooms. But as sales of new cars dwindle, e-commerce sales of
replacement parts are booming. In this QAD Precision Report we look at
these industry challenges and how e-commerce is a growing market for
automotive OEMs. Read the full report here.