US year-end, holiday retail outlook bleak

A U.S. seafood market.

The U.S. retail outlook for the fourth quarter of this year is dreary, providing an ominous outlook for seafood sales, according to new data and insight from major U.S. grocery chains and organizations.

Though overall U.S. retail sales are up 4 percent compared to last year – thanks largely to growth in e-commerce and mail-order sales – grocery chains are releasing uninspiring financial reports that have led them to readjust their guidance for the rest of the year.

After reporting only a 1 percent increase in sales in the second quarter, Cincinnati, Ohio, U.S.A.-based grocery chain Kroger issued a lower sales forecast for the back half of 2023.

“Looking forward, we believe inflation will continue to decelerate [but] the environment will remain challenging for consumers,” Kroger Chief Financial Officer Gary Millerchip said. “We, therefore, expect identical sales without fuel will be at the low end of our full-year guidance range and slightly negative in the second half of the year.”

Kroger had a 1 percent Q2 incline in identical sales excluding fuel, underlying growth of 2.6 percent, and operating losses of USD 479 million (EUR 446 million). However, Kroger will likely realize significant cost savings and profitability if its merger with Albertsons comes to fruition.

Similarly, New York City-based consulting firm Bain and Company is forecasting U.S. retail sales will increase by only 1 percent adjusting for inflation this holiday season, which would be the lowest growth rate since 2018. Retail sales in November and December are expected to reach nearly USD 915 billion (EUR 853 billion), with 90 percent of the growth coming from e-commerce and mail-order sales, Bain said.

“Retailers are facing new challenges this year and are overcoming headwinds from higher interest rates amid increasing debt,” Bain Americas Retail Practice Head Aaron Cheris said. “That being said, several tailwinds may boost holiday retail growth, with prices remaining elevated as compared to last year, even as inflation slows.”

Another warning sign of a dreary holiday retail season is new data showing a slowdown in the growth rate of the U.S. economy, National Retail Federation Chief Economist Jack Kleinhenz said in the organization’s September Monthly Economic Review.

“Progress has been made on combating inflation, but higher prices remain,” Kleinhenz said. “While consumers are still spending, the composition of their spending continues to favor services over retail goods, and even then, there was less momentum going into the third quarter.”

Consumer confidence “took a ... 

Photo courtesy of cdrin/Shutterstock

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