A holly jolly Christmas on the horizon for U.S. retailers?
Holiday sales in the U.S., which are defined as sales that occur in the months of November and December, are expected to grow by 3.6 percent, according to the National Retail Federation (NRF). The ten-year average annual increase is 2.5 percent, which has analysts feeling very positive about this year’s upcoming shopping season. While this sounds positive on the surface, it is important to keep in mind that this is just a forecast. In 2015, for example, a forecasted growth of 4.1 percent was delivered, but the actual 2015 holiday shopping period saw a 3% annual increase instead. Many factors play into the forecast delivered by NRF, including personal disposable income, consumer credit and past monthly sales history.
Factors that currently cast doubt on this positive outlook include fluctuating employment levels, sluggish Gross Domestic Product, and current high levels of inventory. One area, however, that is sure to contribute to growth is ecommerce. The role of online sales continues to grow in holiday shopping, and 2016 is no exception. A 7 to 10 percent increase in ecommerce holiday sales is expected this year.
Read more on the predictions for the upcoming holiday shopping season here.
Risk too great for Nestle coffee supply chain
Almost exactly one year after Nestle’s Nespresso coffee brand first offered South Sudanese coffee beans for a limited time in France, the company announced it will be pulling back its operations in the unstable environment. The company’s South Sudanese project actually began in 2011, in cooperation with TechnoServe, a U.S.-based non-profit organization. The goal was to set up new coffee plants and also bring non-operational plantations back into business. Nestle cited security concerns as the main driver behind the decision to stop all imports from the embattled nation. A company spokeswoman noted that the ceasing of operations is temporary.
According to the United Nations refugee agency, up to 100,000 people may be trapped in the coffee-producing town of Yei. It is these coffee producers that have become a specific target for recent violence in various towns. The quest for the perfect coffee bean has led Nestle into a very dangerous situation which the company plans on closely monitoring in the coming months. This story highlights the risks and dangers associated with global supply chain networks.
Read more on Nespresso’s supply chain situation in South Sudan here.
Lindt achieves transparency goal
Lindt and Sprüngli announced last week the successful completion of one of its supply chain transparency projects. The commitment Lindt made stated that the entire cocoa bean supply chain from Ghana should be traceable and verified. Efforts in this area trace back to 2008 when the company initiated a farming program designed to create long-term relationships with cocoa farmers. Within this farming program, Lindt pays a pricing premium for every ton of cocoa beans that is sourced. The end goal was to incentivize an improvement in farming practices and create better living conditions for the farmers and surrounding communities. These actions laid the foundation for the traceability project. Without the cooperation of the farmers in Ghana, traceability would be impossible.
Across all countries, Lindt will invest 8 million CHF in its farming program in 2017. The achievement of the company’s supply chain transparency goals has also been verified by an independent third party. This coupled with the amount of money Lindt is investing in the project shows it is taking the topic of supply chain transparency very seriously.
Read more on Lindt’s project results here.
Have a great weekend!
