Due to higher inflation and tightening budgets, holiday shoppers are buying fewer gifts than they did last year. In fact, projected holiday sales are only expected to be up 6% to 8% from last year, a decline when taking into account the 8.2% rise in inflation.
This lack of demand has been a problem for many retailers, a major shift from last year. While previously stores struggled to keep items in stock, they’re now sitting on an excess of inventory. Considering Americans are already spending less on non-essential items like electronics and clothing, this has resulted in a severe imbalance of products. More and more retailers are facing diminished profits and lack of storage space as new products keep coming in, but not out. Target lost more than 34% of its stock due to inventory issues, while Nike’s fell 13% in one day back in September for similar reasons.
Plus, off-price retailers will be acquiring better branded merchandise as retailers sell inventory to them, so If you like to shop at TJ Maxx, expect to see an increase in quality products and brands sold in-store.
