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“What supply chain crisis?” say Target, Walmart and Home Depot

Matt Levin Nov 17, 2021
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Large retailers including Home Depot, Target and Walmart have all reported well-stocked inventories ahead of the holiday shopping season. Justin Sullivan via Getty Images

“What supply chain crisis?” say Target, Walmart and Home Depot

Matt Levin Nov 17, 2021
Heard on:
Large retailers including Home Depot, Target and Walmart have all reported well-stocked inventories ahead of the holiday shopping season. Justin Sullivan via Getty Images
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Supply chain crisis? What supply chain crisis?

At least that’s the message that big-box retailers delivered this week. Walmart, Target and Home Depot told investors they have more than adequate inventory to weather the holidays. So, with the logjam at the ports, the shortage of truck drivers and all the rest … how exactly did they pull that off?

You know those local news reports you see every Black Friday of shoppers engaged in hand-to-hand combat over that last power saw at Home Depot? You can’t blame that on broken supply chains this year.

“I wouldn’t expect to see any glaring shortages of product,” said Liz Suzuki, a retail analyst with Bank of America.

She said big-box retailers learned a lesson from Black Friday 2020, when they actually wanted fewer customers in stores and more online.

“They did pre-buy or just bought one or two months before they normally would have. So then they did that for spring, they took that into this year’s holiday season as well,” Suzuki said.

Beyond being well-prepared, big-box retailers get VIP treatment from freight carriers simply because of their size, according to Jason Miller, a professor at Michigan State University.

“They’re gonna get prioritized by the ocean carriers,” Miller said. “And they’re going to get preferential treatment on the inland transportation side from the railroads as well as the trucking companies, given the size and scale.”

The hype around retailers chartering their own cargo ships is overblown, Miller added, but many are finding novel ways around those backed-up ports — especially for expensive items.

“Companies like a Walmart, for an example, that sells a ton of technology,” said Terry Esper, a professor of logistics at Ohio State University. “I would assume they would probably leverage their air cargo capabilities to be able to essentially fly over — pun intended — the congestion on the West Coast.”

That’s an option most small businesses can’t afford — and part of the reason many big-box retailers have picked up market share this year.

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