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Tax Rebates Boost May Retail Sales
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US Loses WTO Cotton Subsidies Dispute
Page 1

UK's Online Spending Still Growing
Page 1

April International Lingerie Show
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The American Red Cross

  June 15, 2008                                           Issue #219


22/24

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Tax Rebates Boost May 
        Retail Sales
New figures from the US Commerce Department show consumers headed back into the stores in May - confirming monthly sales figures posted by many retailers last week.
Retail industry sales for May (which exclude automobiles, gas stations, and restaurants) jumped 3.8% over last year and 0.9% month-to-month. 
Most shoppers hit discounters and grocery stores in May, stocking up on necessity items. 
Clothing and clothing accessory stores also saw their sales increase 0.5% seasonally adjusted from April and 2.4% unadjusted from last May. 
"Thanks to the tax rebate checks consumers received last month, the economy got a nice shot in the arm," said National Retail Federation chief economist Rosalind Wells.
"It's evident consumers are feeling a bit more confident about their expenditures, especially with both April and May sales seeing positive increases in many sectors."

                
        A model wears a garment by La Fresca during the 
International Lingerie Fashion show on April 7, 2008 at the Rio,     
                    Las Vegas.  Photo by Studio Time
See more photos from the International Lingerie Fashion
                                 Show on page 5



18/24   
 
      US Loses WTO Cotton
       Subsidies Dispute
The US could face billions of dollars worth of retaliatory sanctions against its products after failing to overturn a WTO ruling that it paid illegal subsidies to its cotton farmers.
In a June 2 decision, a WTO appeals panel upheld its verdict last year that the subsidies breach global commerce agreements. 
The ruling means that Brazil, which launched the complaint, can ask the WTO to approve sanctions on imports of goods and services from the US.
In a dispute going back to 2002, Brazil has accused the US of paying out $12.5bn in subsidies and export credit guarantees to its farmers.
It also alleges the US kept its position as the world's second-biggest cotton producer because of the subsidies.
The US, however, maintains it has made the changes necessary and that it has been complying with all WTO rules since 2004.
This includes eliminating the so-called Step 2 program which meant US exporters and manufacturers would no longer receive an incentive for buying higher-priced cotton from US cotton growers.        


15/24              Photographed by Lawrence O. Brown

UK's Online Spending Still
             Growing 
Online spending by consumers shows no sign of succumbing to the economic downturn, with Internet shopper numbers at an all time high and online spending growing at its fastest rate for six years according to new research. 
In its latest report - UK e-Retail 2008 - Verdict Research says online spending rose by a substantial 35.0% in 2007 to GBP14.7bn (US$28.9bn) - a rate of growth almost 10 times higher than that experienced by the total UK retail market. 
With Internet access growing and users purchasing more frequently and more heavily online, this strong growth is set to continue, the report says.
It forecasts online retail will reach GBP44.9bn by 2012 - accounting for 13.8% of total spending. 
Yet despite some degree of cannibalization, physical shopping is far from doomed. 
There is still a need and place for physical locations, the key is to ensure that synergies with online retailing are exploited to drive footfall to stores. 
Online shopping is becoming an integral part of UK retail, with retailers and consumers alike getting onboard
In 2007, total retail growth was just 3.6% as consumers' disposable incomes were starting to be squeezed by higher living costs. 
However, the online market expanded by over a third in 2007, driven by a 5.9% increase in internet users - to 33.1m - and a 24.7% increase in online shoppers - to 22.6m. 
Furthermore these shoppers are purchasing more regularly (an average of 16.9 times per year, an increase of 2.7 trips on 2006) and each spent an 
average of 7.8% more than 2006. 
The convenience of the channel is the main reason for its continuing success and is mentioned by more than half of the online shoppers surveyed for Verdict's report. 
"The internet is widely perceived as a cheaper and easier way of finding lower prices and bargains in most sectors," says Malcolm Pinkerton, senior retail analyst at Verdict Research and author of the report. 
"As the cost of broadband falls, consumers become accustomed to Internet shopping and retailers continue to enhance their online propositions, the channel will find itself extremely well-placed to capitalize on the falling consumer confidence and lower levels of disposable income currently impacting the retail market."
Longer term, growth is set to be driven by the ageing population. 
Electricals and food and grocery currently dominate the market, accounting for around half of all sales.  Men tend to buy big-ticket items online, such as electrical goods, which pushes up their average spend. 
There was also a marginal increase in their number of purchases in 2007, mainly driven by a rise in the number of men buying clothing online.


 
 
Chinese Invoice Scam Unproved
Investigations by a US customs and border protection team into the alleged abuse of tariff concessions by Bangladeshi apparel exporters have found nothing wrong, according to Anwar-Ul-Alam Chowdhury Parvez, president of the Bangladesh Garment Manufacturers and Exporters Association. 
Parvez said the customs team's report may even help ease shipments of Bangladeshi apparel to the US - where they generate over US$3bn annually or roughly a quarter of Bangladesh's total apparel exports. 
Sources in the industry and the Bangladesh government revealed that according to the investigation team, some third country exporters stole the invoices which were then used to export Chinese apparel to the US market showing it to be of Bangladesh origin. 
During a wrap-up meeting with officials from the Bangladesh government, the US team praised the Bangladeshi apparel manufacturers' production and export documentation.
The team investigated documents in 30 apparel factories following allegations that Chinese exporters, subjected to quota restrictions, are colluding with some Bangladeshi apparel exporters to show Bangladesh as the country of origin of their goods. 


                          
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