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QAD Precision News Round-Up: 15 May 2020

In the QAD Precision News Round-Up: 15 May 2020, UK retail sales slump; US e-commerce sales skyrocket; American Airlines add more cargo-only services; EU-UK trade talks continue; China waives tariffs; global economy forecast to sharply contract; plus the benefits of direct-to-consumer sales for manufacturers.

Retail 

UK RETAIL SALES FALL 19.1 PERCENT IN APRIL

This week, the British Retail Consortium (BRC) said that retail sales in the UK declined by 19.1 percent in April compared to April 2019. This drop is the sharpest fall since records began in 1995. In addition, Chief Executive of the BRC Helen Dickinson warned that many retailers may have no choice but to shut down unless they receive support from the government. Nonetheless, despite this decline in high street expenditure, the BRC reported an increase in online sales and sales. Online sales, excluding groceries, skyrocketed by 57.9 percent this April, far outpacing the 8.5 percent average annual growth rate. For more on this news story, please see The Guardian. 

US E-COMMERCE SALES SKYROCKET IN APRIL

On Tuesday, Adobe released the latest Adobe Digital Economic Index, which shows that online e-commerce surged in April. According to the index, overall US e-commerce sales grew 49 percent. In addition, daily online grocery sales grew 110 percent between March and April, while sales of electronics increased 58 percent. Furthermore, the popularity of BOPIS (Buy Online, Pick-up In Store) has continued to grow with orders increasing 208 percent year-on-year in April. Consumers are also favoring comfortable clothing, with pajama sales up 143 percent, while sales of jackets dropped 33 percent.  For more information, please see eSellerCafe. 

Transportation 

AMERICAN AIRLINES TO INCREASE CARGO-ONLY SERVICE 

American Airlines is expanding its cargo-only operation with 126 weekly flights to 15 cities in the US and Europe, Asia and the Caribbean. The airline's cargo-only service from the US to Europe will increase with new flights starting in May including services from Chicago O’Hare to London Heathrow in the UK, and Paris Charles De Gaulle in France. For more details, please see Post and Parcel. 

Global Trade

EU-UK TRADE TALKS START AHEAD OF JUNE SUMMIT

This week, talks between the UK and the EU over a post-Brexit trade agreement entered their third round, ahead of the June summit. By the end of June, both sides must determine whether or not to extend the deadline for negotiating a deal past December 31. However, the UK has announced that it does not want to extend the deadline, even if the EU requests one. As a result of the Covid-19 pandemic, talks have been taking place via video link. This round of talks ends today, 16 MAy 2020. For more information, please see BBC.

GLOBAL TRADE TO DECLINE BY 27 PERCENT, UN 

The United Nations Conference on Trade and Development (UNCTAD) has forecast a significant downturn in global trade this year. In the second quarter of 2020, global trade will fall 27 percent following a decline in the export of cars, machine parts and oil. UNCTAD, which tracks the flow of global trade, said that the coronavirus pandemic has affected supply and demand across the globe and has prompted a severe decline in global trade. In the following months, nearly every category of goods is likely to suffer a decrease in trade, adding to a 3 percent fall in the first quarter of the year. For more information, please see The Guardian. 

UK ECONOMY CONTRACTS BY 5.8 PERCENT IN MARCH 

In March, the UK’s economy contracted by 5.8 percent as the country shut down due to coronavirus. Furthermore, the fall in gross domestic product affected all sectors from restaurants and bars to building sites and factories. In addition, the UK’s Office for National Statistics said that GDP shrunk by 2 percent in the first three months of this year compared to the last three months of 2019. This decline is the steepest drop since the 2008 financial crisis. For more details, please see RTE.

CHINA ANNOUNCES TARIFF WAIVERS ON 79 US IMPORT CATEGORIES

On Tuesday, China’s Ministry of Finance said that the government is waiving retaliatory tariffs on 79 US imports. Items that qualify for the waivers include semiconductor parts, medical disinfectants, rare earth metals and chemical products. The waivers will take effect from May 19, and will expire next year on May 21, 2021. To qualify for the waivers, importers must apply within six months of the announcement. For more details, please see Supply Chain Dive. 

QAD Precision News 

THE BENEFITS OF DTC SELLING FOR MANUFACTURERS

The juggernaut that is e-commerce has reshaped almost every industry, shrinking the distance between manufacturers and consumers and allowing brands to build loyalty with customers across a number of channels. 

Even before the Covid-19 pandemic, many manufacturers understood that the digital revolution meant that they were no longer competing just with their traditional rivals, but that digital start-ups — based anywhere in the world — could target, and win, previously loyal customers.

The current pandemic has highlighted the importance of being able to reach your customers at a time when most stores are closed. In this QAD Precision Report we look at the benefits and challenges of direct-to-consumer (DTC) sales for manufacturers. To read the full report, please click here.

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