Logistics Spend (Brick & Mortar Stores)
To determine the total logistics spend and growth of the physical retail industry (brick and mortar stores).
- According to Investopedia, the physical retail industry (brick and mortar stores) spend between 1.7% to 5.1% of total sales on distribution and logistics per annum.
- In 2018, US consumers spent $3.6 trillion in various physical retail stores across the country, according to the US Department of Commerce.
- There are currently no publicly available reports that state the total logistic spend or distribution costs of physical retail stores in the US. Also, traditional retail outlets tend to combine their distribution costs with other forms of expenses, hereby shielding the figure from public scrutiny. However, it is possible to infer from some of the data already found.
- Estimating the lower boundary of the market, which is 1.7% of gross sales ($3.6 trillion) will translate to $61.2 billion per annum. Performing the same calculation for the upper boundary of the market (at 5.1% of gross sales) will translate to $183.6 billion per annum.
- Hence, physical retail stores in the US spend between $61.2 billion and $183.6 billion per annum on logistics and distribution costs.
- Deloitte, in its 2019 Retail Outlook report, cited distribution costs as a major cause of concern for retailers in the coming year. However, no specific percentage was provided to show the growth in this particular aspect of retailing operations.
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