Sales fall for U.S. wholesalers as businesses store surplus stock. All is not lost, however, with analysts predicting a surge in consumer spending yet to come.
As sales dropped by 0.2% at the turn of the year – a decrease unmatched in the past six years – wholesalers have witnessed a 0.3% increase in their stocks over the same period. There has been little growth over the previous seven months in consumer spending, which has been affected by a similar slowing of the overall U.S. economy. In the second quarter of 2015, however, many are predicting a significant increase in consumer spending as the economy readies itself for healthier growth in the coming months. It is hoped that this trend will positively affect wholesalers and their ability to sell surplus stock to re-sellers.
A Difficult Winter
While some wholesalers still experienced healthy figures over the holiday season, some felt the brunt of a series of unfortunate events. The winter of 2014/2015 has been particularly brutal, which always has an adverse effect on the number of shoppers willing to brave the elements and pick up some great deals. Retailers and resellers experienced poorer sales due to this, and so wholesalers also suffered along with the entire chain of supply.
The effects of the winter were further compounded by a labor dispute on the West Coast which seriously delayed shipments of goods to wholesalers. This delay significantly slowed the ability of wholesalers to get new in demand products out to resellers to meet public demand.
And so wholesaler performance was diminished due to a combination of economic slowing, labor disputes, and a bitter winter. Thankfully this trend looks set to change for the better.
Brighter Times Ahead
Many analysts are predicting a rebound from April onwards which could continue into the third and fourth quarters. These forecasts suggest growth of up to 3% which should nullify the negative effects of a difficult winter for wholesalers. If the financial experts are correct, consumers will have increased buying powers and so should produce significantly better results for re-sellers and wholesalers alike.