In the QAD Precision News Round-Up: 12 November, 2021, US CPI surges; Euro zone economy poised to grow; demand for luxury goods skyrockets; Walmart is trialing autonomous trucks; plus managing peak season and more. 

Economy

EURO ZONE ECONOMY TO GROW FASTER THAN EXPECTED

On Thursday, the European Commission said it predicts that the euro zone economy will grow faster than expected in 2021 as it rebounds from the pandemic. Furthermore, it predicts the EU economy to expand strongly next year and expects deficits and public debt to decline. 

According to the Commission, gross domestic product in the 19 countries sharing the euro will expand 5 percent in 2021 following a 6.4 percent recession last year. The Commission expects inflation to reach 2.4 percent in 2021, an increase from 0.3 percent in 2020, before slowing to 2.2 percent in 2022 and 1.4 percent in 2023. For more details, please click here. here. 

US CONSUMER PRICES SURGE 6.2 PERCENT IN OCTOBER

In October, the US consumer price index (CPI) jumped 6.2 percent from the year previous. This was the greatest increase recorded since December 1990. In addition, the result was higher than the Dow Jones estimate of 5.9 percent. 

The core CPI, excluding food and energy prices, rose 0.6 percent and was above the 0.4 percent estimate. Furthermore, annual core inflation increased 4.6 percent compared to a prediction of 4 percent and was the highest gain since August 1991. Fuel and energy prices were responsible for much of the increase. Fuel prices grew 12.3 percent in October from September, and energy prices rose 4.8 percent during the period. Additionally, used vehicle prices contributed to the gain, increasing 2.5 percent from the previous month. For more information, please see CNBC.   

Transportation

WALMART TESTING DRIVERLESS TRUCKS

This week, Walmart revealed it has been testing driverless vehicles since August. The tests in Bentonville, Arkansas run a route from a dark store to one of its retail outlets. The trucks run the delivery route multiple times a day, seven days a week on public roads. Walmart is using Gatik to power its autonomous box trucks. In addition, the retailer is utilizing the service to run predictable routes between its stores. Walmart plans to use the driverless vehicles to streamline its delivery operations as it continues to battle supply chain bottlenecks and a growing driver shortage. For more information, please click here.

Retail

SALES OF LUXURY GOODS TO REACH $327 BILLION IN 2021

This year, the luxury goods sector will surpass pre-Covid levels, driven by domestic demand in the US and China, according to consultancy firm Bain. Bain predicts global sales of luxury items will reach $327 billion (€283 billion) in 2021. Furthermore, the consultancy firm expects the sales of high-end shoes, leather goods and jewelry to fuel the growth. 

Key players in the sector, including LVMH, Hermes and Kering, have recovered from the pandemic due to the removal of lockdowns and social-distancing restrictions. In 2020, sales for the sector dropped 23 percent due to the pandemic, which was the greatest drop on record and the first decline since 2009. For more information, please click here.  

Sustainability

MAJOR AUTOMAKERS PLEDGE TO PHASE OUT GAS VEHICLES

Ford, Mercedes- Benz, General Motors, and Volvo along with 30 countries have pledged to phase out sales of new gasoline and diesel-powered vehicles by 2040. The 2040 phase-out goal will be worldwide and an earlier 2035 goal will apply to leading markets. 

The pledge is not legally binding. Despite this, the United States, China, and Japan abstained from signing. The three countries represent some of the largest auto markets. The 30 countries that did sign the pledge include: Britain, Canada, India, Sweden, Poland, Norway, and the Netherlands. Transportation accounts for one-fifth of the carbon dioxide emissions worldwide. For more details, please visit The New York Times.

AIRLINES PUSH FOR SUSTAINABLE FUELS

The Sustainable Aviation Buyers Alliance (SABA) announced Amazon Air, Alaska Airlines, JetBlue, and United Airlines are now members. SABA helps drive sustainable aviation fuels (SAF) development and production to decrease prices. The alliance was started in April by the Environmental Defense Fund and the Rocky Mountain Institute to support increased demand for sustainable aviation fuels. 

Other notable SABA members include: Boeing, Bank of America, JPMorgan Chase, Microsoft, and Netflix. Almost 2.5 percent of global emissions are from air travel. The United States set a goal to achieve net-zero greenhouse gas emissions from the US aviation industry by 2050. It also set a target of 20 percent lower emissions and backed an industry target of 3 billion gallons of SAF usage by 2030. Sustainable aviation fuel currently accounts for 0.1 percent of jet fuel consumption. For more details, please see Reuters.

Qad Precision News 

THE RETURN(S) OF PEAK SEASON SHIPPING

Peak season is here and it is estimated to be one of the largest yet. A recent survey by the National Retail Federation (NRF) reports US consumers plan to spend $997.73 on gifts and other holiday items this year. The survey also indicates 49 percent of holiday shoppers started browsing and buying before November. This is up from the 42 percent that reported they were shopping early in 2020. 

Similar trends can be seen in the UK. Iconic British retailer Marks & Spencer reported that almost 50 percent of consumers plan to buy all their holiday gifts by the end of November. 

Although early holiday shopping has been a growing trend for some years now, what is new for 2021 is the why. Consumers are reporting high levels of concern over the availability of their desired gifts. Stock shortages and delivery times due to supply chain bottlenecks could result in popular items not being available or arriving late for the holidays.

In this QAD Precision Report, we look at how retailers can manage the high levels of both e-commerce orders and returns. To read the full report, please click here.