Week in Review

June 26, 2022

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Week in Review | Jun 25, 2022

A growing number of retailers – both on and offline – are feeling increasing pressure on revenue from inflation as consumers hold back on spending.

FINANCE

Zalando (Germany) said that for Q2 2022, management expects Gross Merchandise Volume (GMV) growth, revenue growth and adjusted EBIT to be significantly below analyst estimates. The company no longer assumes a rebound of consumer confidence in the short-term, and is updating its guidance for the full year 2022.

Q2 is profitable but weaker than expected.
Zalando now expects Gross Merchandise Volume (GMV) to grow 3%-7% to 14.8-15.3 billion euros ($15.6-$16 billion) for the financial year 2022.
Revenue is expected to grow 0%-3% to 10.4-10.7 billion euros.

Primark (UK) said that sales for the 12 weeks to May 28 reached £1.7 billion ($2.08 billion), up 81% year-on-year. Sales in the quarter were also 4% higher than the same period in 2019.

Clothing for nights out and for holidays were selling well.
Return to offices was also cited as driving store traffic – and sales.

RETAIL

Target (USA) has scheduled its “Target Deal Days” online shopping extravaganza for July 11-13, starting one day before Amazon’s Prime Days (July 12-13) and lasting one day longer.

Deals are open to all shoppers, while Amazon Prime Day deals are only available to Prime members.
Amazon is said to be considering holding a second Prime Day event later in the year.

Primark (UK) will trial a click-and-collect service in the UK as it looks for a practical way to enter the ecommerce market. Initially customers will be able to order 2,000 childrens items online and pick them up at stores.

Customers could immediately try on items they ordered, as well as purchase other items at the store.

Harrods (UK) has postponed its summer discount sale by two to three weeks because of global supply chain delays.

Nordstrom (USA) is looking to its Rack business to drive overall business growth, it said during the Telsey Advisory Group’s fireside chat.

Rack sales grew 10.3% year-on-year during the recent quarter, highlighting the role that off-price is now playing at retail.

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MARKETS

Consumers globally are growing increasingly pessimistic in terms of their view of their personal finances, the macroeconomic outlook and current buying conditions, according to a Morning Consult survey.

Economic confidence among British households has fallen to the lowest level on record, adding to signs that the economy is heading for a recession caused by soaring inflation.

Goldman Sachs has doubled the likelihood of the United States economy suffering a recession in the next 12 months as the Federal Reserve takes aggressive action to combat surging price growth.