Retailers Cautious on U.S. Consumers Risk Holiday Shipping R
Retailers may face a last-minute rush to restock their shelves if household spending improves as it did in the 2009 holiday season.
Declines in imported-container volumes and in shipments by trucking companies such as Werner Enterprises Inc. (WERN) show that “cautious retailers are tightly controlling inventories right now,” said Benjamin Hartford, transportation analyst at Robert W. Baird & Co., a Milwaukee-based investment bank. Shippers will keep supplies low until “there is a clearer picture of consumer demand.”
A similar situation played out in 2009, when companies underestimated sales, then had to expedite merchandise to stores before Christmas amid improving demand. If history repeats, ground and air-transport firms may benefit from a surge in shipments, according to Justin Yagerman, a New York-based analyst at Deutsche Bank Securities Inc.
“Retailers may have to rush goods if spending accelerates in the next couple of months,” Yagerman said. “This could help trucking companies outperform.”
The U.S. consumer has shown little sign so far of wanting to hit the malls. Retail sales unexpectedly stagnated last month, according to the Commerce Department, following a 0.3 percent gain in July that was smaller than estimated by a Bloomberg News survey of economists.
Consumer confidence has fallen to its second-lowest level this year, with the Bloomberg Consumer Comfort Index dropping to minus 49.3 in the week ending Sept. 11. The number of households saying it was a bad time to spend was the highest in three years, as views of the state of the economy edged up to minus 86.6 from minus 88.7 in the prior week. The unemployment rate remained at 9.1 percent in August as job growth stalled.
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