(Reuters) –
The year-end holiday shopping season has been placed in doubt by global trade stalwarts like FedEx and Cathay Pacific Airways, whose business slowdown indicates weaker-than-expected consumer demand rather than a Christmas shopping boom.
The bleak picture comes as consumers around the world battle to deal with rising food, fuel, and housing expenses. According to industry observers, China’s extravagant consumers are becoming even more frugal as a result of the country’s draconian COVID-19 limitations, which have severely hurt the economy.
A global demand slump accelerated at the end of August, according to FedEx, which on Thursday retracted a forecast it had made just three months prior. It is also expected to get worse in the November quarter, it added.
For air cargo and shippers transporting recently released cellphones, toys, and clothing from factories in Asia to the United States and Europe over the Christmas holiday, business is typically frenzied.
However, Western merchants such as Macy’s Inc. and Costco Wholesale Group have discovered that their shelves are overflowing with unsold goods, indicating that they miscalculated demand and will likely be more cautious when restocking.
According to J.P Morgan analysts, the lack of a “freight wave” from China’s re-opening was a bad indication for freight demand, downgrading FedEx stock to “neutral” from “overweight” on the outlook warning.
