Will overstocking allow retailers to spend the holidays? – RetailWire
Sep 20, 2021
Big box retailers are pulling orders earlier than usual and investing aggressively in basics as supply chain bottlenecks threaten to empty shelves during the holiday season.
In many cases, stocks have risen by double-digit percentage points from depressed levels in last year’s pandemic and also up from the same period in 2019.
Target inventories at the end of the second quarter were up 26% year-on-year. John Mulligan, COO, told analysts Target stocks are “well positioned” to boost holiday sales from record gains a year ago, although the situation is not optimal.
“Our guests still see empty shelves on some occasions,” he said. “In some of these situations, we have simply sold beyond our expectations, and our team is working quickly to secure additional quantities. In other cases, the sellers themselves face constraints in their ability to deliver the product. And we work with them to meet these constraints together, guaranteeing as many products as possible on behalf of our customers.
Speaking at the Goldman Sachs conference last week, Lowe’s CFO David Denton said the home improvement chain has placed larger orders for high-demand items and its stock position is in better shape than it was six to 12 years ago. month.
TO Best buy, inventories at the end of the second quarter jumped 55% year-on-year and 23% from two years ago.
CEO Corie Barry told analysts that traders worked strategically to supply as much inventory as possible during the quarter with actions such as acquiring additional transportation, increasing product flow and l ” adjustment of the assortment of stores according to availability. She said: “There will always be challenges, especially when it comes to congested ports and transportation disruptions. But our teams have set us up for as strong an inventory position as possible as we move into the second half of the year. “
A Wall Street Newspaper The article noted that small retailers are often at a disadvantage when negotiating with suppliers or competing for space on container ships. Last year, the lean inventory in the market drove the high-priced sale to help many retailers achieve record profits.
DISCUSSION QUESTIONS: Do you see more benefits than risks in aggressively stocking inventory in today’s climate? What steps can retailers take to protect themselves from inconvenience when operating with high inventory levels?
“What if the retailer overbought, got everything and the demand wasn’t there? It’s not a pretty picture. “