3 charts that depict the year so far
As the first half of the year is drawing to a close and summer holidays are approaching, it is good time to review what has happened so far. The year 2022 has certainly been an eventful year for all retailers and brands. Three images highlight some of the most important developments over the last six months.
Online has not declined, the growth has paused
There has been a lot of discussion around the explosive growth of online during the pandemic. Some of the pundits even argued that customers would not return to their normal routines of buying from the stores.
As it turns out customers did return to stores. They returned to stores on a historical magnitude. In 2021 and the early 2022, the rapid growth in the share of online stopped. Despite the decline in the share of all retailing, online retailing did not decline. Online has continued to grow, even on top of the great jump in revenue during the pandemic.
Inventory problems after the pandemic
The pandemic was a great boon for big retailers with large assortments. The pandemic also created uncertainties around supply chains. That encouraged retailers to stock with inventories and in Amazon’s case, with warehouses. As the pandemic started to ease, many of the big retailers have reported slowing growth numbers and growing inventory levels.
That prompted the stock market to punish Walmart and especially Target. Wall Street regarded their inventory levels as risky. That led to a steep decline in share prices.
Competitive dynamics changing in the grocery retailing
As the inflation is growing at a record pace, price led retailers seem to be growing in popularity. This is especially marked in the UK where Aldi and Lidl have grown rapidly during the first half of the year.
During the pandemic, the big grocery retailers with big assortments grew as the growth of the discounters (Aldi & Lidl) stopped after a decade of stable growth.
As the inflation started to grow, the strong price perception of the discounters has been highlighted. This can be seen in the meteoric rise of the market shares.