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Ok Lucy, there's gonna be some "Splainin' to do".


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2022 Jan 23, 7:26pm   700 views  10 comments

by Misc   ➕follow (1)   💰tip ($0.10 in tips)  

Once upon a time... not too many years ago...retail sales were cyclical. Ex-food the Christmas season counted for about 40% of retail sales. The other 3 quarters of the year counted for about 20% of sales each.

In 2020, Covid and the lockdowns happened in the early Spring. People were sent unemployment dollars greater than what they earned working, stimulus checks were sent, there was a massive increase in the equipment needed to work from home and other avenues of expenditures outside of physical goods were curtailed. Thus, instead of there being a decrease in online retail spending, there was an increase and this persisted throughout the year.

In 2021, there was an additional stimulus check, millions of people cheated the system by not paying rent and there was still limited things to do with ones money outside of buying physical goods. The Christmas season of 2021 was spectacular with an emphasis in spending in the early part of the season.

The online retailers, particularly Amazon, performed marvelously. The massive amounts of goods ordered from residential customers were delivered and generally within a few days.

To get that to work, there was a massive increase in delivery services. Not even Amazon, with its massive sales would be able to show the gigantic upfront costs of the personnel and equipment required to pull off this feat. Jeff Bezos contracted out these delivery services to entrepreneurs. These people borrowed like crazy to purchase the delivery vans and other equipment needed to move the merchandise. I am guessing that hundreds of billions of dollars were borrowed, that the lending institutions rolled these notes into CLOs, and pawned them off onto high yield mutual funds. The delivery personnel were paid along with fuel and maintenance. The entrepreneurs gained the profit. The massive debts do not show on Amazon's books as they are not directly Amazon's obligations.

Online retailers have never had a quarter where sales were down from the previous quarter. With inflation running at about 7%, I do not expect any more, free money stimulus from the Feds this quarter.

There is massive over capacity in this sector. Layoffs and bankruptcies are pretty much assured.

Comments 1 - 10 of 10   

1   Tenpoundbass   2022 Jan 23, 9:01pm  

Some great insight to chew on. Those courier vans are everywhere.
Also the Uber Eats drivers will fall in this category. The market for $17 breakfast or lunch sandwich delivery can't last much longer.
I got an Uber Eats bag delivered to my door last week. It was from IHop. Here's the funny thing. I was making a late breakfast bacon, eggs, hash browns and biscuits, was going to do pancakes. About a few minutes before I was done, I walked to my front door to open it and have a peek outside, as I do about twice a day out of habit, when I walk past the front door(I hang out mostly in the back of the house). And on my doorstep was a bag with IHop in it, the exact same breakfast I was just minutes away from completing myself.
It had been there for almost two hours. I didn't see any name or address on the receipt other than IHop. So did the only sensible thing, and brought it in and gave the kids a pancake upgrade, and they got real bacon instead of the hogjowl I like to use, I pitched the hash browns, and eggs that came with it. The receipt was for $17.80.
Who in the hell pays $17.80 for a $2.99 Grand Slam?
3   Misc   2022 May 9, 11:27pm  

Yep, I called it for the e-commerce sector pretty well.

I'm sure there's stress on the delivery operators, but nothing that's hit the headlines yet.
4   AmericanKulak   2022 May 9, 11:47pm  

Tenpoundbass says
Who in the hell pays $17.80 for a $2.99 Grand Slam?




The group is heavily composed of those from a time period and their name starts with M.

The same group that invented the $7 Lucky Charms eat-out cereal bar.
5   BoomAndBustCycle   2022 May 10, 12:34am  

AmericanKulak says

Tenpoundbass says
Who in the hell pays $17.80 for a $2.99 Grand Slam?




The group is heavily composed of those from a time period and their name starts with M.

The same group that invented the $7 Lucky Charms eat-out cereal bar.


It’s really not that expensive if you shop around a bit on the app. Some restaurants markup large amounts but The average markup is usually closer to 10% and then I tip 10% on top of that. So it is basically the same as if you are in at a restaurant and tipped 20%…. But you get the convenience of having it delivered to your door without the 15-30 minute round trip commute in traffic.

Restaurants are getting screwed cause when I use the door dash app I NEVER tip the restaurant just the delivery guy so my food is hot.

Also nowhere does the grand slam even at Dennis cost $2.99 anymore. Go to their website it’s over $13 in most locations now.
6   Misc   2022 Aug 12, 4:15pm  

Looks like the Amazon delivery drivers in my neighborhood have disappeared.

Last couple of packages came via US mail.

Just anecdotal evidence I was right.
7   Patrick   2022 Aug 12, 4:20pm  

Misc says

Online retailers have never had a quarter where sales were down from the previous quarter. With inflation running at about 7%, I do not expect any more, free money stimulus from the Feds this quarter.

There is massive over capacity in this sector. Layoffs and bankruptcies are pretty much assured.


The massive overcapacity in online retail is what whacked Shopify stock down from $160 to $40.

They bet that everyone would buy online from now on, but they were wrong.
8   Onvacation   2022 Aug 12, 4:22pm  

BoomAndBustCycle says

So it is basically the same as if you are in at a restaurant and tipped 20%

Except for the part where the food is cold and in a styrofoam box. Of course the ambience at your house might be nicer than Applebee's.
9   FortwayeAsFuckJoeBiden   2022 Aug 13, 9:18am  

Tenpoundbass says

e everywhere.
Also the Uber Eats drivers will fall in this category. The market for $17 breakfast or lunch sandwich delivery can't last much longer.


where i live, noone shops, stores don’t last in business.

and to be fair, i fucking hated consumerism. much agreed with George Carlin on consumerism and iy destroying the planet.
10   AmericanKulak   2022 Aug 13, 12:59pm  

BoomAndBustCycle says

Also nowhere does the grand slam even at Dennis cost $2.99 anymore. Go to their website it’s over $13 in most locations now.


It's not worth dining out for the most part.

The ingredients are Sysco/Cheney Brothers working with Chef Microwave.

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