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.
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.
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.
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.
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
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.
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.
Peak season is here and it is estimated to be one of the largest yet.
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
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.