Larger Retailers Gain in E-Commerce Space During Recession

Thoughts on Carrier Evolution (Sep 2 2010)

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   As you might expect, larger retailers gained e-commerce market share at the expense of smaller providers in the second quarter of 2010, year over year. According to comScore, larger retailers gained because they were able to provide deeper discounts, free shipping and larger inventories. 

   The largest 25 U.S. retailers gained 5.6 percent market share over the year, while all other retailers lost 5.6 percent, an 11-point swing in market share. Separate survey data from the National Federation of Independent Business sheds additional light on the state of small business.

   At a subjective level, small business "optimism" continued an "unprecedented" low reading that NFIB never has seen before.

   Since the third quarter of 2009, job creation plans have underperformed the recoveries from the other two deep recessions covered by the NFIB survey also shows. Small business capital spending remains two points above the 35 year record low reached most recently in December 2009.

   The net percent of all owners (seasonally adjusted) reporting higher nominal sales in the past three months lost four points, falling to a net negative 15 percent, 19 points better than June 2009, but still far more firms reporting negative sales trends quarter to quarter than positive. 

   The net percent of owners expecting real sales gains lost 10 points, falling to a net negative five percent of all owners (seasonally adjusted).

   None of those directional trends would be unexpected in the aftermath of a deep recession. Larger, better-capitalized firms tend to gain share during tougher times, at the direct expense of smaller and less well-capitalized firms.

   One would reasonably expect to see similar trends in the communications business, with the larger firms taking market share from smaller firms. 

   http://www.nfib.com/Portals/0/PDF/sbet/sbet201007.pdf

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