While the retail industry has been leading the nation’s shaky economic recovery, many of the same challenges seen in 2011 will be experienced again in 2012, once again impacting the supply chain. With persistent high unemployment and slow growth, retailers will need to find ways to build upon their success. Accordingly, retailers will remain cautious in managing inventory levels and will pay close attention to economic indicators throughout the year.
With a presidential election in 2012, the focus of Congress and the administration will be on job creation and economic growth. As the largest private sector employer, supporting one in four U.S. jobs, the retail industry needs to be at the center of that focus. Congress will have the opportunity to pass a long-term highway reauthorization bill with a focus on freight movement and proper funding. This could significantly jump-start the recovery, helping retailers and all transportation-related industries.
Unfortunately, any job creation may be threatened by the economic losses being felt by transportation providers. If the ocean carriers continue to see the losses they experienced in 2011, will it lead to the removal of capacity and increase in rates similar to 2010? Will this lead to consolidation within the industry? In addition, the administration is prepared to finally issue significant changes to driver’s hours-of-service rules that would negatively impact the trucking industry and efficiencies retailers have built within their supply chains.
2012 appears to be another challenging year for the economy and retailers alike. Even with these challenges, retailers are expected to be able to meet consumer demands without any disruption. Retailers will continue to use the lessons they’ve learned throughout the economic recovery to remain drivers of the economy and job creators.