Signals— and feelings— likely are a bit mixed as housewares retailers and their suppliers march into 2019.
The glow of what by some accounts was a record-breaking holiday sales season has been dimmed by new cracks in the economy and nagging challenges in a retail market that continues to weed out weak operators and lose doors at an alarming rate.
Consumers didn’t hold back during the holidays, good news for retailers in a stronger position to take omnichannel share in this transformed marketplace.
Mastercard SpendingPulse reported the biggest holiday sales increase in six years, a jump of 5.1% to more than $850 billion with online shopping growing by 19.1%. Overall sales at department stores dropped by 1.3%, but online sales in the channel increased by 10.2%.
ShopperTrak, meanwhile, reported just a slight year-over-year drop in store traffic between November 18 and December 29 with late-season shoppers lifting brick-and-mortar retailers to a relatively successful holiday sales period.
Holiday sales surged, however, against a backdrop of less-than-ideal economic developments.
Unresolved U.S.-China trade turmoil, a turbulent stock market and worries of a looming economic slowdown have widened the divide between enthusiastic recent consumer spending and a guarded outlook. The Conference Board’s Consumer Confidence Index in December was 128.1, down from 136.4 in November. Consumers generally lowered their near-term expectations for income, labor and overall business conditions.
Bracing For More
Meanwhile, the housewares industry, while historically well positioned to ride out economic challenges, remains pressured by demands associated with the escalation of e-commerce. And, despite the revitalization of several traditional retailers, the industry is bracing for more store closings and bankruptcies.
So where does that leave everything? A note I received recently from the chief executive of a housewares company sets the stage:
“Looking forward to 2019. It seems a pretty mixed bag with record holiday sales, but a drop in consumer confidence and the stock market swooning,” the executive wrote. “We will keep marching on. I’m pretty happy with the progress we are making generally, but it’s getting harder with all the cost inflation from tariffs, logistics, etc.”
Marching on, indeed. That needs to start with collectively candid and sincere acknowledgment of the challenges across the supply chain, especially if today’s trade uncertainties might lead to dramatic changes in that supply chain.
If we’ve learned anything in this new era of stubborn partisanship, it’s that lack of cooperation, compromise and collaboration can grind progress to a halt.
Retailers and suppliers, while celebrating strong recent sales, face the same looming threats. They can confront them in unity, or they can face the consequences of their division.
Wouldn’t it be so much more productive to march into 2019 together?