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.
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.
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
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
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.