29 December 2022 (Lloyd's List) - RETAIL shipments in North America have weakened in recent months, signalling extra caution being exercised by consumers and continued pressure to boost shipping demand, according to data from supply chain visibility platform FourKites. Retail segments across the board—including big box and apparel, grocery, and home and electronics—have all experienced a slowdown in shipments in November and December this year, during which volumes contracted considerably year on year. In comparison, a volume growth was seen in September and October in most product categories, except for home and electronics. “The slowdown in retail shipments is a sign of cautious consumer spending and retailers’ wish to salvage as much margin as they can by keeping inventories as low as possible,” said FourKites vice president of global industry strategy Mark Delaney. “They’re walking a tight rope as they try to balance shopper demand with the hope to not have to slash prices after the holidays, kicking off what will likely be a tough year.” Retail inventories remained plump, according to the latest government data revealed. The level in November reached $738.7bn, representing a 0.1% increase from previous month, or a 18.4% surge year on year. The October sum was revised down from a monthly contraction of 0.2% to a decline of 0.4%, according to the Commerce Department’s Census Bureau. The sluggish consumer demand alongside China’s Covid flare-up has kept exporters from Asia under strain, data from FourKites shows. The 28-day average shipment volume from Asia-Pacific region to North America for FourKites customers decreased by 28.1% in November from the previous month, while the tally in December is down by 50% since the beginning of October. “Retail imports from China will continue to be under pressure, as Covid, Lunar New Year and economic headwinds collide,” said Mr Delaney. “I expect imports of durable goods to remain slow in the months ahead.” That said, the Christmas and the subsequent New Year holidays are expected to generate some extra thrust in spending. And some forecast retailers, which entered the holiday season this year with higher-than-usual inventories amid supply chain disruptions and high inflation, to continue the markdowns in a bid to clear out old merchandise. “Retailers could be forced to offer deeper discounts post-Christmas to clear through excess inventories,” wrote Morgan Stanley analysts led by Alex Straton in a note last week. This has led to optimism about “an early burn-out of inventories in the US,” according to Container xChange, an online container trading platform. “[This] resultantly will kickstart the inventory replenishment cycles a bit sooner than the supply chain and shipping industry predicted earlier this year,” it said. “This would cause an increase in demand at the export hubs as the US starts to work on balancing its order-to-inventory ratio.”