A late summer theme is big chain stores saying they’re turning to big sales to get people to buy excess inventory that piled up amid pandemic distortions. Walmart, Target, Kohl’s, Macy’s and many more. This cuts into profits and rattles shareholders, but for consumers, the markdowns are nice.
Retailers are overstocked in a lot of categories where consumer spending has slowed down this year.
“Things like apparel, or sporting goods, or, you know, school supplies — if there’s any over-purchasing, you’re going to see that stuff marked down,” said Sucharita Kodali, a retail analyst at Forrester.
But even though consumers have been spending more on services lately — think restaurants and hotels — Kodali said it’s not going be hard to convince people to buy more stuff.
“If prices come down enough, for a certain good, there are going to absolutely be people who are gonna be willing to purchase it,” Kodali said.
That’s because goods are still in high demand even though prices have been rising, economist Shannon Seery at Wells Fargo said. “So if you look at the share of consumption that’s directed toward goods, it still remains above pre-pandemic norms.”
And as long as that continues, some retailers might go back to building up their inventories, Seery said, to make sure they have enough goods in stock.
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