Excess inventory and fears of a looming recession are pushing retailers across North America to offer bigger and longer Black Friday deals than usual.
After struggling to keep shelves stocked due to global supply chain disruptions during last year’s holiday season, the retail industry has moved in the opposite direction, with warehouses now piled high with goods. And businesses are under pressure to cut that inventory before the holiday season is likely to set off consumer fatigue amid high inflation and a slowing economy, said a consumer at consultancy KPMG. and Kostya Polyakov, national industry leader in the retail industry.
“Retailers really need this holiday shopping season to be successful,” said Poliakov.
For shoppers, this means extra generous promotions and a wider selection at discount outlets as retailers sell more products at discount outlets. But while deals are expected to start sooner and last well beyond the normal Black Friday period for this holiday, lingering logistical issues could delay deliveries, and higher fuel prices could lead to higher consumption. Some of the person’s savings may be lost.
walmart company WMT-NTarget Co., Ltd. TGT-Napparel giant Gap Inc. GPS-N We’re one of the retailers that says they’re tackling overstock. And while publicly available data on goods piled up in Canadian warehouses is scarce, especially in sectors such as apparel, experts say retailers north of the border are suffering from similar problems. I’m seeing evidence that there is.
In Hudson’s Bay, for example, shoppers are already finding online discounts of 50% or more, which is unusual early in the season, said Riza Amurani, principal and founder of consulting firm Retail Strategy Group. says.
The problem of overstocking also means that unsold items are hitting discount retailers, a boon for cost-conscious shoppers looking for coveted brands.
“The market is flooded with quality branded merchandise,” said Ernie Herrman, chief executive officer of off-price retailer TJX Cos. Inc. TJX-X, said in its earnings call on Nov. 16. TJX operates Winners, HomeSense and Marshalls in Canada.
Overall, discounts are likely to be particularly large for big-ticket items, where demand surged early in the pandemic, Amurani said.
Consumers rush to buy desks, laptops and tablets for remote work and online learning COVID For example, restrictions do not need to replace these items in the near future. But Amrani said retailers are buying too much office furniture and appliances. Other popular pandemic purchases for the home, such as televisions, mattresses and appliances, could also be available at huge discounts.
Ironically, some of the holiday discount jackpots are inflationMany retailers have overestimated consumer demand and were caught off guard by the impact this year’s price hikes will have on shoppers’ wallets and emotions.
Additionally, many retailers have brought in holiday merchandise earlier than usual to break through last year’s supply chain delays, she said. I’m here.
Luckily for retailers, people are flocking to malls and filling digital carts despite inflation, rising borrowing costs and a recession. However, the economic pessimism and dark clouds that have descended on the holiday season have caused a shift in consumer demand. Shoppers are now more likely to use credit to make purchases, making them laser-focused on sales, he said.
Still, deals are likely to continue after Black Friday and Cyber Monday, but those looking to pick up gifts under the tree in time for the holiday season should consider the extra time this year. may be better. Backlogs at ports have eased, but unloading of goods may take longer than usual due to manpower shortages. Poliakoff advised shoppers that he added one to two weeks to the delivery date promised by the retailer.
Canadians may want to factor a shipping fuel surcharge into their vacation budget. Canada Post and other major delivery service surcharges were around 40% for domestic deliveries as of the end of November.
Shoppers may also need to pay particular attention to returns policies this year, Amlani said.
Rules for returning unwanted gifts may be stricter this year as retailers are eager to reduce inventories.
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