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Smaller Retailers Fear Fuel Costs Will Dampen Holiday Sales

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Smaller Retailers Fear Fuel Costs Will Dampen Holiday Sales

America’s smaller retailers could be facing a tough holiday season due to high shipping costs.

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That’s according to a report Friday (Nov. 6) from CNBC, which noted that while consumer demand is strong, these business owners worry that rising shipping costs—driven by increasing fuel prices—will dampen their profits.

“I am losing money at this point, and I’ve really taken a huge hit this year,” Jenni Shields, owner of the Kansas-based hair accessories company Evie Pearl Handmade, told CNBC. “I feel like it’s just been this slow increase up [in shipping costs], and I feel horrible.”

She launched her business eight years ago, paying $2.93 to ship an order. Now, that price has risen to nearly $6, the report said.

CNBC cited National Retail Federation data projecting that retail sales through the remainder of the year are expected to climb 4.2%, or $1.01 trillion in spending. That’s up from $972 billion last year, the equivalent of 3.1% growth. However, some of that growth is due to inflation, or consumers paying more for the same products.

“Customers all expect to spend more this holiday, but part of why they expect to spend more is they expect things to cost more, not because they’d like to spend more or they were hoping to get more quantity of stuff,” Aaron Cheris, global retail practice head at Bain & Company, told CNBC.



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