By Nathalie Voit
Ongoing inflation and a return to in-store shopping mean bad news for many e-commerce retailers.
According to a Mastercard SpendingPulse report published on May 12, total retail sales nationwide accelerated 7.2% from 2021. Despite the higher levels of consumer spending, e-commerce sales fell 1.8% over the year, while in-store sales grew 10%. Several high-profile online retailers are feeling the squeeze.
Amazon, on April 28, reported its slowest revenue growth in over two decades as the COVID-19 pandemic and the subsequent war in Ukraine left it overstaffed and struggling to cope with sluggish consumer demand.
Shares of the e-commerce giant on May 12 fell to a fresh 52-week low of $2,048.11. The stock has fallen more than 33% since the start of the year.
Other online-focused retailers also reported larger-than-expected losses in May. Shares of the online furniture store Wayfair are down more than 8% on May 16 after the stock hit a new 52-week low last week. Year to date, the stock is down almost 75%.
Shares of the online marketplace Etsy also tumbled to their lowest price in 52 weeks on May 12, while shares of Poshmark and Shopify hit new 12-month lows on Thursday. Etsy stock has dropped 60% since the beginning of the calendar year, while Poshmark and Shopify stock is down about 30% and 73%, respectively.
In a note written to clients on May 13, senior analyst at JP Morgan Brian Ossenbeck warned of weak financial performance at United Parcel Service over the following quarters.
“Pressure on U.S. consumers continues and e-commerce growth is declining,” Ossenbeck said. “UPS is doing very well in a dynamic environment but we expect further improvement to be gradual and we do not see much to pull the 2022 guidelines already,” he added, downgrading the stock from a “buy” to a “neutral” rating, according to CNBC.
Shares of the parcel carrier are down 15% this year after the stock reported its worst closing price in 52 weeks on Thursday amid a broader market sell-off.
