Online Holiday Sales Could Hit $107 Billion

November 6, 2017

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MnRA Board Chair Ruthena Fink introduces herself to students at Retail Rally in early October.

Holiday Season

Online Holiday Sales Could Hit $107 Billion

From the Retail Dive, Daphne Howland, November 3, 2017

"Online sales this holiday will rise 13.8% to $107.4 billion, while in-store retail sales will grow 10%, according to Adobe's holiday retail report, based on number crunching from its Adobe Analytics unit. Most of those online purchases will be for lower-dollar items, as they were last year, when sales of toys (39% growth) and apparel (20%) outpaced jewelry.

Adobe also expects Cyber Monday this year to become the largest online shopping day in history, rising 16.5% to generate $6.6 billion in sales. Thanksgiving Day sales will also be robust, according to the forecast, which pegs 15% increase year over year to $2.8 billion. All told, one out of every six dollars this holiday season, or $19.7 billion, will be spent between Thanksgiving and Cyber Monday, the firm said.

Large retailers - those with more than $100 million in annual revenue - will see higher order values and desktop conversion rates than their smaller counterparts (those with less than $10 million in annual revenue). But smaller retailers have an advantage on mobile and will likely see a higher average conversion rate of 1.9% as they attract more shoppers with an intent to buy, according to Adobe."

Employment

Retail Jobs Decline in October as Hurricanes Continue to Skew Numbers

From the National Retail Federation, November 3, 2017

"Retail industry employment declined by 18,000 jobs in October, the National Retail Federation said today. The number excludes automobile dealers, gasoline stations and restaurants. Overall, the economy added 261,000 jobs, the Labor Department said.

"Retail jobs were down in October while overall employment was up, but it is difficult to draw conclusions because the jobs data is still distorted by the aftermath of the recent hurricanes," NRF Chief Economist Jack Kleinhenz said. "The storms have caused some consumers to defer discretionary spending but at the same time retailers selling building materials saw a significant increase in sales as homeowners and businesses affected by the storms rebuild and make repairs. There continues to be a significant number of job openings in retail, so the drop could reflect a difficulty in hiring given the low unemployment rate. Also keep in mind that retailers are on the verge of adding half a million or more temporary workers for the holiday season."

"We look forward to seeing how the tax reform bill introduced this week will affect employment," Kleinhenz said. "We expect that tax reform for employers will go a long way to creating jobs and boosting the nation's economy."

The October drop compares with an increase of 4,200 jobs in September, which was revised after initially being reported as a loss of 4,600 jobs. The three-month moving average in October showed a loss of 6,900 jobs compared with the same period a year ago. That was an improvement over a three-month loss of 8,500 in September.

Employment at stores selling building materials and supplies was up by 5,500 jobs in October, reflecting a surge seen since the hurricanes in August and September.

Kleinhenz noted that retail job numbers reported by the Labor Department do not provide an accurate picture of the industry because they count only employees who work in stores while excluding retail workers in other parts of the business such as corporate headquarters, distribution centers, call centers and innovation labs. Warehouse and storage jobs, for example, were up by 3,100 jobs in October over September but do not count as retail jobs even if the workers are employed by retailers.

Economy-wide, average hourly earnings in October increased by 63 cents - 2.4 percent - year over year. The Labor Department said the unemployment rate decreased to 4.1 percent, down from 4.2 percent in September. "

Taxes

Chicago Repeals Sweetened Beverage Tax

From the Crain's Chicago Business, October 12, 2017

"Momentum has shifted in the battle over taxing sugary beverages.

Commissioners in Cook County, home of Chicago, voted to repeal a tax on sweetened beverages on Wednesday, less than a year after voting in favor of the measure and only two months after it went into effect. Michigan lawmakers also pushed forward a bill to ban future attempts to enact food and beverage taxes at the local level on Thursday. Soda taxes were voted down in Santa Fe, New Mexico, in May and in St. Helens, Oregon, earlier this month.

The news represents a victory for the beverage industry, including Coca-Cola Co. and PepsiCo Inc., which have lobbied against the taxes.

"There are better ways to address obesity and help fix government budgets gaps than taxes that hurt local businesses and everyday consumers," the Coca-Cola Co. said in a statement following the repeal. "Our combined product and marketing efforts can be more effective at reducing the sugar people drink over the long term."

Cash-strapped cities have been increasingly looking at beverage taxes as a way to shore up their finances, but they've had limited success in pushing them through. Philadelphia became the first major U.S. city to pass a tax on soft drinks in June 2016. Four U.S. cities followed suit in November, including Chicago. Prior to Philadelphia's success, there had been about 40 attempts to enact a soda tax in cities across the U.S. since 2009. Only Berkeley, California's measure passed.

Ads in favor of the tax were financed by New York Mayor Michael Bloomberg, who gave $10.2 million in support of the measure and whose philanthropy supports anti-smoking campaigns and other health initiatives. The former mayor, who has backed similar measures in other U.S. cities, is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News. "