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Retail Numbers Up in February 2009 PDF Print E-mail
Written by Scott Koegler   
Sunday, 22 February 2009

The US Census Bureau reported in its February 12th Advance Monthly Sales for Retail Trade and Food Services update, that retail trade sales increased by 1.1% over December, 2008. Is this a welcome trend, or simply an adjustment from a dismal holiday season? What does this mean for us in the EDI sector, in terms of activity?

In the same report, the Bureau noted that February sales for 2009 were 11% lower than in 2008. Which of these numbers surprises you? For me, the fact that February's sales were better than December's is the real news. Of course, the figures are relative, and adjusted for seasonal variables, meaning there was still more actual money spent in December, but when taken in context, the numbers seem interesting.

ImageIn the EDI world, it's all about transactions, not retail dollars. And the reality of transactions is that there are fewer transactions. There are fewer retailers today than there were just a few months ago. And anecdotal indications are that when consumers do make purchases, they are hunting for lower priced alternatives.

This calculus would seem to suggest that if the total retail sales dollars are increasing, and the value of each purchase is less, the number of items being sold should be higher.

I've heard from readers that there is an increased concentration from retailers on honing their purchasing methods even beyond their previous levels. If that's the case, that means that purchase orders will be denser... each purchase order may contain the same number of line items, but for higher quantities of product. And, if they are intent on optimizing their trading practices, these purchase orders are likely to be more complex.

For example, there may be greater reliance on cross-docking, a topic we've covered here before, and a practice that is likely to be executed differently from retailer to retailer.

My conclusion is that this is a time to increase your interactions with your trading partners beyond the transaction level. Increasing your contact in an effort to better coordinate methodologies may just squeeze a bit more efficiency out of the supply chain. And with fewer trading partners, and less attention being paid to new store openings, there should be opportunities to concentrate on the minutea that makes up the trading cycle, and provides better efficiencies.
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