Beijing, 15 Nov (Xinhua) -- US media reported on 13 November that the biggest wish of some large retailers in the United States this year's holiday shopping season is to clear excess inventory.
With some big retailers reporting earnings this week, Wall Street will be eyeing another metric: inventory levels.
Michael Baker, retail analyst at D.A. Devinson & Co., a U.S. equity research firm, told CNN: "Inventory is the most important factor. This is not usually the case, and it used to be only one factor. Inventory is more important than any indicator. ”
Customers shop at a supermarket in San Mateo, California, on September 13. Xinhua News Agency (photo by Li Jianguo)
As economists warn of falling U.S. savings account deposits, rising credit card debt and an increased risk of recession, retailers are eager to clear inventory and get started with ease in the new fiscal year.
Baker said the idea now is for retailers to clear inventory before the sales environment becomes tougher.
Retailers have faced a sharp turnaround over the past six months. Some items that were out of stock at the beginning of the pandemic are now on clearance lists, such as loungewear and coffee makers.
On September 13, in New York, USA, customers prepare to buy food. Xinhua News Agency (photo by Guo Ke)
CNN reported that as rents and daily necessities rise, Americans are buying less high-priced and buy-or-out goods.
Retailers typically place orders 6 to 12 months in advance, especially for bulky items and household items. When seeing strong consumer demand or tight supply chains leading to some items running out of stock, some retailers will increase or accelerate orders. Inventory levels at Walmart Inc and Target Corp rose sharply in the quarter ending April 30, shocking investors.
Target subsequently lowered its performance forecast twice, saying it would cancel orders, cut prices and take other strong measures to clear inventory.
Pedestrians walk in a commercial block in Washington, D.C., on November 4. (Photo by Xinhua News Agency reporter Liu Jie)
John Verner, chief executive of Walmart America, acknowledged in June that the company would "make a wish" to clear most of its excess inventory. He warned that it would take about a few quarters for the company's inventories to return to healthier levels.
Aberkronby-Fitch and Gap, which operate casual wear, have suffered similar problems, and many companies have lowered their performance forecasts.
Neil Sanders, an executive at a global data retail consulting firm, said that although retailers have cut prices sharply to clear their warehouses, it is still difficult to sell summer clothing stocks in the winter, and flat-screen TVs and blenders sold in the early days of the epidemic are also sold with a hammer.
Sanders said the overstock in physical stores will also reduce consumers' experience this holiday shopping season, which may prompt them to turn to sites such as Amazon. (Bu Xiaoming)