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Retailers are already planning for the end of the year — and they’re getting nervous

Kristin Schwab Jul 5, 2023
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To protect themselves from consumers potentially tightening their belts, retailers might have to carry less inventory and be more flexible with marketing. Kena Betancur/Getty Images

Retailers are already planning for the end of the year — and they’re getting nervous

Kristin Schwab Jul 5, 2023
Heard on:
To protect themselves from consumers potentially tightening their belts, retailers might have to carry less inventory and be more flexible with marketing. Kena Betancur/Getty Images
HTML EMBED:
COPY

Even though Americans just celebrated a summer holiday, retailers are thinking ahead to the holidays at the end of the year. And while consumer spending has been strong recently, retailers are worried that won’t carry through all of 2023.

Retailers have been on edge in the recent months, thanks to sticky inflation and rising interest rates. But now?

“We’re being hit with a whole new whack of challenges, especially with the loan repayments,” said Sonia Lapinsky, managing director at AlixPartners.

She said those federal student loan payments that start back up in October will hit middle-income consumers who have still been doing some discretionary spending. Companies are worried the shift in peoples’ budgets will impact everything from back-to-school shopping to the holidays.

“Retailers are going to have to pull everything out of their arsenal to make sure they protect themselves,” Lapinsky said.

That might look like keeping less inventory and being more flexible with marketing. Because, according to Jessica Ramirez, a senior retail analyst at Jane Hali and Associates, consumers have pivoted their focus from buying home goods and clothes to spending on food and accessories for parties and other social activities.

“So anything that will continue to be an event, you want to compliment that lifestyle,” she said.

So shoppers might see fewer discounts on the items that usually fill holiday lists.

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