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Supply
Chain by the Numbers |
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- June 11, 2020 -
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Massive Store Closings; eTruck Maker Nikola Sees Stock Soar; World Bank Predicts Major Drop in Global GDP; Warehouse, Parcel Jobs See more Gains |
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20,000-
25,000 |
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That's how many US retail stores are forecast to be closed in 2020, according to new analysis from Coresight Research. Mall retailers will take the brunt of the beating, accounting for 55-60% of the total – and that will leave malls themselves in even worse shape than they are right now. The number of total closures seems certain to set a new record, perhaps more than twice the 9300 stores shuttered in 2019. The plethora of vacant storefronts will leave mall owners scrambling to fill those spaces or find new uses for their real estate, in a period in which few retailers still growing via bricks and mortar. And even chains expanding store counts are downsizing to smaller footprints. Coresight says so far there have been 4,005 announced closures by US retailers in 2020, including 900+ by Pier 1 Imports, roughly 300 by the health chain GNC, more than 200 by Tuesday Morning, 224 by JCPenney, and 250 by Victoria's Secret, among others. Globally, Zara parent company Inditex said it is closing 1,200 Stores.
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That is the expected fall in global GDP IN 2020 due the on-going impact of the coronavirus. If accurate, the decline would be the worst since World War II and nearly three times as steep as seen in the 2009 global recession. Although the World Bank projects a turn to growth of 4.2% in 2021, it warned that an “even worse scenario is possible” if the health crisis extends for additional months. The World Bank's new forecast is more negative than the 3% decline predicted by its sister organization, the International Monetary Fund, back in April, obviously much earlier in the crisis. The drop in US economic activity is forecast to be even worse than the global decline, with a projected decrease of 6.1% for the year, with a 4% recovery in 2021 – but with many caveats, such as assuming more stimulus spending. The bank expects China to see some growth in 2020, but just barely, at 1%. The World Bank report also worries that tens of millions of people in developing countries could fall into extreme poverty this year, in a humanitarian crisis. |
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8500 |
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That's how many warehouse jobs in the US were added in May, according to new data from the Bureau of Labor statistics this week. That's a change from the 9500 jobs lost in April, when continued hiring for fulfillment jobs by a few giant retailer such as Walmart and Amazon could not make up for other distributors seeing a big fall in demand. But in addition to the May increase, help-wanted postings for warehousing jobs are about even with where they were at a year ago while postings most other sectors have contracted. The BLS also said 12,100 jobs were added by couriers and parcel carriers, as ecommerce volumes stayed strong even in a very weak economy. But it was a different story for trucking firms, which shed 1200 jobs after cutting 89,800 positions in April. Meanwhile, rail carriers reduced payrolls by 2,100 jobs last month after cutting 4,100 positions in the month before. |
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That's how much the price of a share of hydrogen fuel cell truck-maker Nikola rose on Monday, a few day after becoming a public company by merging with a shell company designed specifically for this type of transaction. It rose another 9% Tuesday before falling back 14% the next day. Still, Nikola now has a market cap of some $23 billion - not bad for a company with only about 250 employees. Nikola plans to make a series of alternative fuel vehicles, from Class 8 heavy duty trucks to a consumer pick-up model. The stock spiked higher Monday after Nikola founder Trevor Milton tweeted that reservations for Nikola's zero-emission pick-up truck, dubbed the Badger, would kick off later this month. The company earlier this year said the Badger pick-up will be available as a battery electric or fuel cell vehicle. The company said last week that preorders for its vehicles have topped $10 billion and that it expects to start generating revenue in 2021. Nikola already has announced major pre-sales to some large companies, including an 800-truck order from Anheuser-Busch and a multimillion dollar order with carrier US Xpress Enterprises.
