Week in Review

July 17, 2022

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Week in Review | Jul. 17, 2022

One of the strangest things about the current economic situation is the unprecedented case of rising prices in the face of weakening consumer demand and high inventories.

FINANCE

Burberry (UK) reported Q4 sales grew only 1% to £500 million (592 million), held down by a 35% drop in sales in China. Elsewhere, sales grew 16% for the quarter ended July 2.

In addition to lockdowns in China, the number of Chinese tourists visiting Burberry stores were down 90%, according to the brand.

Richemont (Switzerland) reported Q1 sales grew 20% to 5.26 billion euros ($5.31 billion).

The US was the company’s largest single market for Q1, with sales up 25%.
Sales in Europe rose 42% in Q1, aided by the return of tourism.
Sales in China and Macau saw double-digit declines.

Costco (USA) reported net sales rose 16.9% to $188.34 billion, for the 44 weeks ended July 3.

Net sales rose 20.4% to $22.78 billion for the month of June, its sixth consecutive month of double-digit growth.
Costco membership renewal rate in the US and Canada is 92.3%.

Nike (USA) and Fanatics (USA) signed a deal that will see Fanatics produce Nike-branded replica jerseys, shorts, and other consumer gear for NCAA programs, allowing Nike to focus on developing finely tuned products for athletes.

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RETAIL

Boohoo (UK) customers will now have to pay £1.99 ($2.25) to return items. The company has joined a growing number of online retailers to introduce such a charge.

Prime Day (July 12-13) boosted U.S. online spending up 8.5% (not only on Amazon) to $11.9 billion, from $11 billion a year ago, according to Adobe Digital Economy Index data. Amazon does not separately report Prime Day sales.

Last year Prime Day was postponed from its traditional July dates to October.
This year’s average Prime Day orderwas $52.26, up 17% from $44.75 in 2021, but below 2020 and 2019, according to figures from Numerator.
Top items sold were Amazon devices (Echo Dot, Fire TV Sticks, Blink security cameras)

Consumers are spending on experiences this summer with air ticket sales up 18.2% year-on-year (7.3% from 2019) and hotels up 33% (30.4% from 2019), while luxury goods inched up 4%, according to MasterCard SpendingPulse June report.

MARKETS

UK retail sales fell 1% year-on-year in June, its third successive drop, according to the British Retail Consortium (BRC).

Consumers were also feeling less optimistic about their ability to live within their means and their ability to spend on nonessential items, according to Barclaycard.
June spending was up While overall spending is down, spending on travel and entertainment increased.

The euro has fallen by 10% against the dollar this year to $1.01 and is approaching parity with the U.S. currency for the first time in two decades amid concern over slowing growth.

US retail sales rose 1% in June, with core retail sales rising 0.8%, according to Commerce Dept figures. However many analysts suggest that this is the result of inflation-driven higher prices.