Amazon has a strong and growing presence in the US, which makes it an important indicator for retail sales. SpaceKnow indices play a leading role in exploring supply chain movements of the company by tracking activity at its distribution centers. We can observe how the company operations are performing in near-real time and understand how Amazon prepared for Black Friday and the Christmas season.
Recently, Amazon released its Q3 financial results and Q4 expectations. Amazon’s Q4 expectations were significantly affected by uncertainty in the economic environment. Amazon's net sales are expected to grow between 2% and 8% YoY in the fourth quarter, well below levels in the last two years.
Inflation has a significant impact on the retail sector. All else equal, high inflation levels will cause a slowdown in net sales in the fourth quarter.
SpaceKnow’s Amazon Accumulated Level Index (non-seasonally adjusted) for the U.S. tracks Amazon logistic centers. The number of locations are updated as the company opens or closes locations. Figure 1 shows that the growth rate of activity in Amazon Logistic Centers has decreased in time and it moves in line with the sales revenues of the company. We expect this to continue in the upcoming months.