Run the Numbers, FN’s new data column, unpacks the data that’s driving top retail trends in the industry.
This weekend, the first set of President Donald Trump’s 15% tariff on $300 billion worth of Chinese goods went into effect, with the second round delayed until Dec. 15 following the peak holiday shopping season.
Trade groups and industry executives have warned about the levy’s impact on American businesses and consumers, and retailers have already been gearing up for cost increases within their supply chains and product lines. As many companies have indicated the need to raise prices, a new report from global tech firm Intelligence Node found that the import tax could potentially deter shoppers from splurging on gifts and other purchases during the crucial fourth quarter.
The survey, which gathered data from roughly 1,000 consumers across the United States, showed more than half (or 54%) of respondents are anticipating higher prices in the coming months and expressed worries that new tariffs on products from international markets would affect the cost of items they regularly buy. (It also added that about 22% of shoppers are discouraged from making a purchase due to price.)
Many are expected to be on the hunt for bargains and other markdowns, with a majority of respondents noting that they would prefer to wait for a sale before snapping up electronics as well as apparel, footwear and accessories — categories that will be heavily impacted by the upcoming tariffs.
According to the National Retail Federation, retail sales for the November-December 2018 period inched up a lower-than-expected 2.9% to $707.5 billion year-over-year. For 2019, CEO Matthew Shay remarked that “the economy is very strong, the unemployment rate is very low, wages are growing, consumers are spending” — but Trump’s tariffs would ultimately cost Americans a combined $6.9 billion each year for apparel and footwear as well as put pressure on domestic manufacturers and companies with limited sourcing options outside of China.
“If retailers want to meet their holiday sales projections, they will need to optimize their promotional pricing now more than ever,” read Intelligence Node’s report, adding that companies should “not wait around for the big calendar-day deals to boost sales.”
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