A recent poll showed that 80% of the U.S. population views inflationary conditions negatively.
Retailers continue to struggle with ramping up sales in 2024 as inflation impacts consumer spending habits, forcing them to slow down and recalibrate their expenses. It is not that consumers aren’t buying; they are just choosing to spend money on more essential items. However, it seems that even inflation cannot compete against the irresistibility of e-commerce, as online purchases have risen dramatically in the same period. Then again, this spike might have been because of Amazon’s spring sales event, though.
In this article, we review some of the trends and news shaping the freight, CPG, and retail industry. So, continue reading to get up to speed on all the latest happenings in the industry.
Despite the effects of price stabilization, inflation remains a major concern for many Americans, affecting their shopping habits.
The impact on consumers has forced major U.S. retailers, including Target and Walmart, to lower their prices on thousands of items just to compete. Target recently reported a 4th consecutive quarter of declining sales, and Walmart saw a 3.8% increase in sales, although the increase was driven by a rise in transactions. To compete under the current conditions, Target reduced prices on household staples like butter and cleaning supplies, while Walmart increased its “rollbacks” program, offering temporary discounts on groceries.
With the new strategies, these retail giants aim to attract budget-conscious consumers feeling inflation pressure.
Despite inflation and higher borrowing costs, consumer spending remains healthy, and many believe it is all thanks to the strong job market accompanied by rising wages.
U.S. retail sales rose in March, exceeding economic experts’ expectations. The rise in sales is a clear indicator of a robust consumer sector and showcases a solid economic performance for the first quarter. A major reason for the continued consumer spending, even with rising inflation, is the strong job market with rising wages. Online retail has led the charge for consumer spending, mostly driven by promotions like Amazon’s spring sales event.
It wasn’t all good news, though. While core retail sales grew, sales of discretionary items like furniture, electronics, and sporting goods declined, suggesting a shift toward essential purchases.
Inflation could have impacted consumer spending after all.
U.S. trade wars with China are finally impacting some Chinese businesses as Temu leads the charge for businesses in the world’s second-largest economy to reconsider priorities around the U.S. market.
China-based e-commerce platform Temu has recently been a victim of government restrictions because of security concerns similar to that of TikTok. The platform and other Chinese businesses are accused of using forced labor and benefiting from tax advantages due to its direct-to-consumer model. As a result, the e-commerce giant is diversifying its focus away from the U.S. That said, while considering making Europe a priority, Temu will continue to do business in the U.S.
The challenge is that e-commerce makes up about 20-25% of trans-Pacific air freight volumes, and this move will definitely impact that, but executives remain optimistic. Only time will tell.
The consumer packaged goods industry is undoubtedly one of the biggest industries in the world, and it continues to grow, even amid inflation.
The global CPG market is thriving, reaching $2.29 trillion in 2024, and is projected to hit $2.79 trillion by 2029. North America alone boasts a $2 trillion CPG industry, with established giants like Coca-Cola and P&G. The growing middle class in Asia has positioned the CPG market for rapid expansions. In a bid to reach more of their customers, CPG companies are embracing online marketing and e-commerce platforms. However, their priority is still with brick-and-mortar stores. Most of their customers are Millennials and Gen Z, followed by Gen X and Baby Boomers.
It may not be all rosy for the industry, though. Raw material shortages, production delays, and rising costs might bring setbacks the industry is unprepared to manage, putting a dent in its growth.
With inflation being a pain for consumers and businesses alike, the already volatile freight market will probably get much more turbulence than we are used to. However, in the midst of all that, what if you had a reliable partner to ensure streamlined and seamless shipping operations?
The good news is that such a partner is not beyond your reach. It is Zengistics, a platform that allows you to optimize and grow your business logistics efficiently.
With us, you have the following:
You can have all this and more. Connect with us today.
Operating on the world’s first collaborative logistics platform, Zengistics is a technology company that executes freight.
