CHICAGO -- Like retailers, most (65%) suppliers who participated in CSP's 2018 Outlook Survey predicted some improvement for business conditions in the year ahead. Nearly 30% believe conditions will remain the same, whereas only 6% predict conditions will improve greatly.
However, unlike retailers, who are mostly worried about today’s tight labor market, 42% of suppliers view increasing distribution and delivery costs as the greatest challenge facing their businesses today. The two issues are related; the trucking industry is facing similar labor conditions experienced by c-stores. The Bureau of Labor Statistics reports trucking hires have averaged just 1% annual growth since 2015.
But labor is not the only issue affecting distribution and delivery. One recent report from the U.S. Census Bureau of the Department of Commerce shows total e-commerce sales for the second quarter of 2018 were estimated at $127.3 billion, a 15.2% year-over-year increase. The effects of e-commerce are beginning to be felt in distribution and delivery: On a recent earnings call, TravelCenters of America cited changes to trucking routes due to e-commerce as one reason it is opening its small-format TA Express models.
What do you expect will happen to business conditions next year?
Source: CSP 2018 Outlook Survey
Recent research from New York-based Coresight Research suggests global e-commerce revenues are set to double from $18.7 billion in 2017 to $40.1 billion in 2022.
For the most part, the problems keeping suppliers up at night are not from within the c-store and fuel retail industries but from geopolitical forces.
What are the top three business challenges your company faces today?
Source: CSP 2018 Outlook Survey
“Strong future prospects, sustainable year-over-year growth, unstable global economic conditions including tariff concerns [are] undermining business confidence,” wrote one supplier respondent.
Increased tariffs primarily due to the escalating trade war with China are sending ripples of uncertainty to all corners of the U.S. economy. “Tariff issues are becoming a real concern for folks, especially who work in manufacturing and farmlands,” says Caleb Silver, editor-in-chief of Investopedia, a website for financial investing and analysis.
Which issue or trend will most affect your business in 2019?
Source: CSP 2018 Outlook Survey
The Federal Reserve Bank of Dallas recently surveyed 364 business executives in the manufacturing and service industries about tariffs. While the question of whether the tariffs are good or bad received a mixed response, 65% of manufacturers said tariffs increased their uncertainty.
Click here to read the complete Outlook Survey report.
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