NEW YORK: Holiday shopping reports released Thursday underscored anew the challenges US retailers face in the Amazon era — even if consumers are willing to open their wallets to spend.
The updates were a mixed bag overall, with several retailers reporting small or moderate increases in comparable store sales during the critical November-December period.
But a report from Macy’s aroused the most angst on Wall Street, after the chain slashed its profit forecast even as it signaled a modest increase in sales.
Shares in Macy’s plunged almost 20 percent, while nearly every major retailer was pulled down as well.
That included companies like Target that reported higher holiday sales and confirmed — but did not raise — profit forecasts.
The results were an ugly finale to a holiday shopping season that opened with high expectations owing to robust consumer confidence amid a strong employment market, relatively low gasoline prices and a boost from tax cuts.
Mastercard SpendingPulse in December estimated holiday sales growth of around 5.1 percent to more than $850 billion, the strongest jump in the last six years.
By that estimate, the 2018 holiday shopping season was a strong one — just not for retailers.
“It was a good season. Consumers had more money to spend. They spent it,” said retail industry consultant Dana Telsey.
“But the cost of doing business is getting higher.”
Traditional brick-and-mortar retailers have invested in heavily beefing up their online platforms and offering incentives to lure buyers, such as free shipping during the peak holiday season.
At the same time, these companies also have spent heavily to improve the in-store experience, hiring consultants to help beautify the surroundings and in many cases employing more workers during the peak festive season.
The latest results suggested retailers still have not found a winning recipe for the transition to the e-commerce era.
“We know expenses are always a problem as more and more stuff moves online because people simply will not pay for you shipping it to them,” said retail industry consultant Jan Rogers Kniffen.
“They want it to be the same price in the store in my door. That’s just the way it is.”
Experts say the retail industry is still undergoing an existential shakeout.
Companies like Macy’s, JC Penney and Gap have shuttered stores in recent years, while Toys “R” Us went out of business — a fate that could soon befall iconic American retailer Sears.
Macy’s shares tumbled 18.7 percent after it reported an increase of 1.1 percent in comparable sales, but lowered its annual earnings forecast to a range of $3.95 to $4.00 a share from $4.10 to $4.30.
Sales were dented by a fire in a distribution center in West Virginia and a pre-Christmas “earn and redeem” promotional event that was unsuccessful, Macy’s said.
“The holiday season began strong,” Macy’s Chief Executive Jeff Gennette said, “but weakened in the mid-December period and did not return to expected patterns until the week of Christmas.”
Target said comparable sales grew 5.7 percent over the holiday, while Kohl’s put sales growth at 1.2 percent. L Brands, the parent of Victoria’s Secret, reported flat comparable sales for the five weeks ending January 5.
Bookseller Barnes & Noble estimated sales growth at 1.3 percent over the two-month period, adding that its earnings guidance “may be reduced by as much as 10 percent” due to increased advertising and promotional costs.
Analysts said the declines were exacerbated by expectations that earnings growth will be tough in 2019 after a strong 2018 following the US tax cut enacted in late 2017.
Increased costs bite US retailers despite higher holiday sales
Increased costs bite US retailers despite higher holiday sales
- Mastercard SpendingPulse in December estimated holiday sales growth of around 5.1 percent to more than $850 billion, the strongest jump in the last six years
- The 2018 holiday shopping season was a strong one — just not for retailers
How mining can transform Saudi Arabia’s economy
- Kingdom’s mineral wealth valued at $2.5tn, positioning mining as a third pillar of the national economy
RIYADH: Saudi Arabia is accelerating its push into mining as part of its economic transformation under Vision 2030, amid the growing importance of critical minerals and rare earths.
The Kingdom’s mineral wealth is valued at $2.5 trillion, positioning mining as a third pillar of the national economy alongside hydrocarbons.
The mining industry could give Saudi Arabia an edge in transition minerals and supply chains by expanding extraction, processing and the logistics needed to move materials to market, according to economists and industry specialists.
Saudi Arabia is home to more than 45 identified minerals, including gold, copper and uranium, according to the Vision 2030 strategy.
Momentum has been supported by measures aimed at making mining easier to invest in and faster to scale, including updated regulations, digital licensing platforms, specialized mining services, and new transport and rail links to mining areas.
Vision 2030 aims to raise mining’s contribution to gross domestic product to SR240 billion ($63 billion) by 2030, create 200,000 direct and indirect jobs, and attract $27 billion in new investment, according to published government targets.
Signs of progress are starting to show in the mining sector in terms of exploration activity, licensing and new discoveries.
“The mining strategy shows it’s working very well, evidenced by the rapid rise in exploration and industrial licenses, and major new mineral discoveries,” Talat Hafiz, an economist and financial analyst, told Arab News.
Saudi Arabia is undertaking the world’s largest geological survey, covering about 700,000 sq. km of the Arabian Shield for $1.5 billion, he said.
The number of mining licenses issued exceeds 2,000, according to official data, and the Kingdom’s mineral wealth is valued at 90 percent higher than it was in 2016 when Vision 2030 was rolled out.
A key milestone highlighted in Vision 2030’s mining strategy was the introduction of a new mining investment law, which reduced the tax rate to 20 percent from 45 percent to spur investment and align the sector with global standards.
The Kingdom’s mining resources position it well to be a critical supplier of raw materials that are integral to energy transition as clean-energy technologies require large volumes of mined materials.
Copper is central to electrification and power networks, while battery supply chains rely on minerals such as nickel and lithium. Phosphate is a key industrial input with wider economic value.
Reliable supplies of metals and minerals used in power grids, batteries and electric vehicles can attract investment and support downstream industry in the Kingdom.
Saudi Arabia’s Jabal Sayid site, northeast of Jeddah, ranks among the world’s top four resources for rare earth elements, Khalid Al-Mudaifer, vice minister of industry and mineral resources for mining affairs, recently told Al Eqtisadiah.
It will help meet Saudi Arabia’s needs for minerals used in magnet manufacturing, EVs and wind energy, while also supporting global supply, including the US market, he said.
Mining can also catalyze investment in the Kingdom, widen supply-chain employment, and boost non-oil exports and private-sector growth, according to economists and policymakers.
Mines, processing plants and the infrastructure around them require large upfront capital spending, creating a pipeline of work across construction, equipment, utilities and logistics.
“When a mining sector scales, the economic footprint extends well beyond extraction,” said Turki Al-Nahari, vice president of global mining at Ecolab, told Arab News. “Growth typically occurs across engineering services, industrial water management, logistics, laboratory testing, equipment reliability, environmental services and digital performance systems.
“That shift creates demand for skilled engineers, technicians, data analysts and operational specialists,” he added.
In 2025, Saudi Arabia’s mining exploration budget increased 600 percent to $146 million from $21 million in 2022.
“This growth is driven by ongoing geological surveys, technological advancements and higher exploitation budgets, all of which signal stability and opportunity, attracting foreign investment,” Manraj Lamba, a mining economics analyst at S&P Global, said in a recent report.
Mining projects are easier to finance when the size and quality of the deposit are clear, costs are competitive, and rules and taxes are stable, Abdullah Al-Harbi, an economist familiar with the industry, told Arab News.
Investors want solid feasibility work, credible timelines and evidence a project can stay profitable through swings in commodity prices, Al-Harbi said.
Saudi Arabia’s pipeline includes 24 exploration-stage projects and 17 more advanced developments, according to S&P Global.
“Its proactive approach to geological surveys and resource assessment has uncovered significant potential across gold, copper, phosphate and bauxite,” Lamba said.
Large projects also tend to generate employment across a wider industrial supply chain, including contractors, maintenance, laboratories, transport and a range of operational services.
To boost employment and support hiring and training, Saudi Arabia has moved to standardize job roles and skills for the mining industry.
HIGHLIGHT
Vision 2030 aims to raise mining’s contribution to gross domestic product to SR240 billion ($63 billion) by 2030, create 200,000 direct and indirect jobs, and attract $27 billion in new investment.
The Kingdom rolled out a framework related to employment and skills in the mining industry in January at the Global Labor Market Conference.
The framework is “a tool which ensures clear definitions of occupations and their required skills,” the Kingdom’s Minister of Industry and Mineral Resources Bandar Al-Khorayef said. It will cover more than 500 job roles, detail the necessary skills, responsibilities and titles, he added.
Exports from the sector are already rising in tandem with investments to develop the industry and create jobs.
Saudi Arabia exported 5.7 million tonnes of phosphate fertilizer in 2024, up about 6 percent from 2023, according to a GASTAT report.
As the energy transition accelerates, Saudi Arabia’s advantage may be strongest beyond extraction alone.
“Saudi Arabia’s most realistic advantage in the accelerating energy transition lies in combining selective mining with strong processing and refining capabilities, supported by its emerging role as a logistics and supply-chain hub,” Hafiz said.
The Kingdom’s position between Africa, Europe, and Asia favors downstream processing and value-added industries, he added.
“Saudi Arabia is prioritizing minerals that are both financeable and strategically aligned with emerging industries such as electric vehicles and clean energy technologies, where markets are clear, and demand is scalable,” Hafiz said.
Aluminum, phosphate, and similar commodities remain a key focus to support local manufacturing, infrastructure development and downstream industries while strengthening export capacity, he said.
“Once construction concludes, the priority shifts to operational stability and performance optimization,” Al-Nahari said.
“Small efficiency gains, applied consistently across large-scale operations, compound materially over time,” influencing cost as well as uptime and competitiveness over the life of a mine, he added.
As the global race toward electrification and decarbonization accelerates, the Kingdom is effectively positioning itself beyond its oil legacy with its strategic commitment to the minerals sector, which will play a critical role in powering the future.
Its investment in exploration, infrastructure, and downstream processing anchor it as a pivotal supplier in the critical minerals and rare earths value chain in the era of energy transition.
