As the holiday shopping season approaches, major U.S. retailers could be saddled with too much stock for a second straight year, according to a Reuters analysis, jeopardizing retailers’ profit margins and generating steep discounts for shoppers. LSEG Workspace, a financial news and data platform, calculated inventory turnover ratios of 30 major U.S. retailers for Reuters. To determine which chains are most vulnerable to carrying excess stock – a problem that raises retailers’ costs – LSEG divided each retailer’s cost of goods sold by the average value of its inventory in the second quarter. Stuffed stockrooms are especially challenging for retailers this year because American shoppers are expected to spend just 3% to 4% more this season, roughly on par with inflation. That would represents the slowest pace of growth in five years, according to industry estimates.
Walgreens Boots Alliance is betting its 8,700 bricks-and-mortar stores, and not a network of fulfillment centers, hold the key to speeding up delivery of online consumer orders and increasing sales. The pharmacy recently closed a warehouse in Edwardsville, Ill., dedicated to filling e-commerce orders for household items such as toothpaste and nail polish, signaling that it is going all-in on the idea that its stores will do double duty as both retail outlets and hubs for home deliveries. Walgreens will have its store employees pick and pack items for same-day delivery through third-party apps such as DoorDash and Uber Technologies’ Eats division. The strategy, which doesn’t include the company’s pharmacy operations, is meant to make handling of online orders more efficient by having a single system for handling goods rather than managing separate distribution networks for e-commerce and in-store sales. Walgreens says 78% of Americans live within 5 miles of one of its stores.
Renewable energy firms are mostly suffering a dire earnings season as struggling supply chains, manufacturing faults and rising production costs eat into profits. With the world trying to transition at pace toward cleaner energy, equipment manufacturers are struggling to keep up with soaring global demand, leading to rising production costs and questions over the economic sustainability of large-scale projects from the industry’s major players. Specialist wind energy firms are also often finding themselves outbid for seabed licenses by traditional oil and gas players. Should they win a contract, electricity prices are often too low to justify the manufacturing costs, leaving companies looking to their governments in Europe and the U.S. to deliver greater subsidies and restore balance to the market. As a result, most wind energy stocks are down sharply since the turn of the year.
Deputy Assistant Secretary for Textiles & Apparel at the US Department of Commerce, Jennifer Knight, reveals the “co-production” fashion supply chain is the new focus for the US with the CAFTA-DR region being well positioned to grow its fashion sourcing market share. The US is doing a “reset” on how it does trade policies with a focus on supply chain resilience Knight tells a live audience during her US Textiles and Apparel Industry Update at the World Fashion Convention in Philadelphia. Knight reminded the audience that supply chain resiliency is a buzzword for not just the US but the world and in US commerce there’s a big effort towards achieving it so “we’ve become the de facto supply chain analysis group”. She explained that the newly launched supply chain group will work with industry deep divers, so it will have ongoing analysis that’s data-driven and will aim to identify choke points ahead of time.
That’s all for this week. Enjoy the weekend and the song of the week, Fight Test by the Flaming Lips.
The post This Week in Logistics News (November 11 – 17) appeared first on Logistics Viewpoints.