US retail inventories overshoot sales by $26bn
Sea-Intelligence takes stock of stocktake stakes
US retail inventories are overshooting their post-financial crisis trend. This could foreshadow a slowdown in box demand
US RETAILERS’ inventory growth is “very excessive” compared to long-term trends, according to analysts at Sea-Intelligence.
Data from the US Census Bureau show retail inventories growing from 2009-19.
But by August 2024 inventories were $26bn higher than could be accounted for by the normal trend development, Sea-Intelligence said.
A deviation of more than 2% in August 2024 was “not only very visible, but also the largest deviation we have seen since the financial crisis”.
“Not only are the retailers building inventory, but they are also now building inventory which is very excessive compared to the long-term trend,” the firm said.
Wholesalers had decreased their inventories in 2023 and stayed steady in 2024. Manufacturers’ inventories had been stable since late 2022 with only a marginal uptick in 2024.
But inventories for wholesalers and manufacturers were much higher than any pre-pandemic trend.
Sea-Intelligence said the early onset of container shipping’s peak season has been driven by retailers moving in products earlier than they were being sold.
“If this is the main driving cause, it would also imply a subsequent sharp drop in imports — which indeed tallies with the market developments shown in spot rates on the transpacific since the peak in mid-July.”