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Amid Surging Inflation, Inventory-Swamped Retailers Push Big Discounts
Zubu Brothers ^ | 6-17-2022

Posted on 06/17/2022 5:23:35 AM PDT by blam

Though consumers are being hammered by price inflation at gas stations and grocery stores, they may be surprised by what they find at electronics, clothing, furniture and appliance stores. Swamped by excess inventory, many major retailers are offering big-time discounts on a variety of consumer goods.

One such retailer is Target, which has twice cut its profitability outlook in recent weeks. In its June 7 warning, Target projected its second-quarter operating margin would be roughly 2%, well less than half the 5.3% the company projected in May.

At the same time, Target said it was “planning several actions in the second quarter, including additional markdowns, removing excess inventory and canceling orders.”

“We thought it was prudent for us to be decisive, act quickly, get out in front of this, address and optimize our inventory in the second quarter — take those actions necessary to remove the excess inventory and set ourselves up to continue to be guest-relevant with our assortment,” Target CEO Brian Cornell told CNBC.

Last month, inventories at mega-retailers surged 26% over the previous year. Idle product is a double whammy, since it also entails higher storage costs.

Retailers’ sales urgency translates into better deals on items like furniture, home decor, clothes, televisions, computers and kitchen appliances.

WalMart, Best Buy, Gap and Urban Outfitters are among those reportedly cutting prices, but discounts aren’t confined to major chains. Last week, a Fred’s Appliances store in Missoula, Montana was asking just $1,799 for a package of four GE appliances—a refrigerator, range, dishwasher and microwave.

Today’s widespread inventory problems started in 2021, as Bloomberg explains:

Big retailers rushed to build up inventories last year amid soaring consumer demand and transportation bottlenecks—going so far in some cases as to rent their own cargo ships. Now, they’re trying to figure out how to sell all their stuff.

Several factors contributed to today’s retail inventory pile-up:

◾Longer lead times on product deliveries forced purchasing managers to peer farther into the future when projecting their inventory needs, heightening the risk of the forecasting errors that are now manifesting themselves in retailers’ warehouses.

◾Shifting consumer needs: As the country moved out of pandemic mode, retailers found customers spent more on office wear and less on casual clothes and home goods.

◾Lower discretionary income: In an era of $5 gas and $1 avocados, consumers forced to shell out more money to cover basic needs have less money to work with.

That last factor may thwart retailers’ plans for a mass summer inventory clearance. Not only is consumer cashflow under pressure, but Americans’ credit card balances have mushroomed back to a record-high $867 billion. Stir in morale-sapping stock market losses and record-low consumer sentiment, and retailers may be facing a daunting task.


TOPICS: Society
KEYWORDS: discounts; inflation; inventories; retailers
Find an electric generator on sale and buy it.
1 posted on 06/17/2022 5:23:35 AM PDT by blam
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To: blam

I know we’re supposed to hate green energy here, but I was thinking about a solar panel and battery pack. They’re sold together as a “solar generator”.


2 posted on 06/17/2022 5:27:41 AM PDT by Celtic Conservative (My cats are more amusing than 200 channels worth of TV.)
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To: blam

They should have ordered tampons.


3 posted on 06/17/2022 5:30:57 AM PDT by FarCenter
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To: blam

During recessions, cash is king when it comes to buying stuff.


4 posted on 06/17/2022 5:33:21 AM PDT by 1Old Pro
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To: Celtic Conservative
“ we’re supposed to hate green energy here…”

I don’t believe that’s entirely true what we hate is Anything being shoved down our throats with lies and threats. Solar panels have their place but so does oil and coal
5 posted on 06/17/2022 5:34:24 AM PDT by The Louiswu (We couldn't 'afford' $4 billion for Trump's wall at the southern border?)
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To: blam

Yet, the furniture and mattress stores that I visited in the last couple of weeks, had very high prices, including Ashley, Kane’s, Rooms to Go, Badcock, Mattress Firm and others.


6 posted on 06/17/2022 5:45:49 AM PDT by adorno
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To: The Louiswu

Yep, green energy developed by the market and embraced by the market are fine. What we hate is government holding a gun to our head and forcing green energy down our throats before the technology is market ready.

What we hate is government hijacking our tax dollars and subsidizing green eneregy and picking winner and losers rather than letting the free market pick winners and losers.

What we hate is government force and government interference.

If a guy working in his basement discovers a cheap renewable energy source, I am OK with that.


7 posted on 06/17/2022 5:55:16 AM PDT by Freedom_Is_Not_Free (America -- July 4, 1776 to November 3, 2020 -- R.I.P.)
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To: The Louiswu

“..what we hate is Anything being shoved down our throats with lies and threats. Solar panels have their place but so does oil and coal...”

^THIS^
I doubt anyone one here is against technological advances and/or progress that benefit all of mankind.
IF, whatever it is, can’t stand on its own feet in the competitive free marketplace, but is, instead, financed and forced/pushed down consumers’ and manufacturers’ throats by so-called government “policy makers”, then they can shove whatever it is straight up their gay, little, anal orifices... sideways...and do so with vigor.


8 posted on 06/17/2022 5:56:54 AM PDT by lgjhn23 (Pray for America....)
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To: Celtic Conservative

40 years ago, my grandfather installed solar water heater. Back before it was trendy.


9 posted on 06/17/2022 6:00:23 AM PDT by NetAddicted (Just looking)
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To: Celtic Conservative

I know we’re supposed to hate green energy here, but I was thinking about a solar panel and battery pack. They’re sold together as a “solar generator”.


Hell, I am more of an environmentalist that any greeny, just is not my identity/ideology.

Appropriate application of the technology is the issue, never the technology. But that is complicated, so people reduce to “fer it or agin it”.


10 posted on 06/17/2022 6:17:17 AM PDT by PeterPrinciple (Thinking Caps are no longer being issued but there must be a warehouse full of them somewhere.)
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To: blam

Find an electric generator and buy it


I suggest dual or tri fuel.

More fuel options when (if?) the shtf. We currently have 1500 gallons of propane and a dual fuel (no use for natural gas. Nearest pipe of that is 25 miles away)


11 posted on 06/17/2022 6:49:55 AM PDT by cableguymn
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To: adorno

Yep. Furniture is expensive nowadays. Top of the line recliner chair is $2400.


12 posted on 06/17/2022 7:00:42 AM PDT by subterfuge (I'm a pure-blood!)
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To: cableguymn
"We currently have 1500 gallons of propane "

I'm envious.

The Obama's just installed a 2,500 gallon tank.

Why Have The Obamas Installed a 2,500-Gallon Commercial Propane Tank in their Martha's Home?

13 posted on 06/17/2022 7:18:44 AM PDT by blam
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To: blam

Adam Smith’s “invisible hand” at work.


14 posted on 06/17/2022 7:19:23 AM PDT by sergeantdave
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To: blam

we have 2 1000 gallon tanks..

why? IDK came with the house. we fill at summer rates and always make it through the winter with 7-900 gallons left over.

i do like the fact that I don’t have to keep checking a 500 to see if it’s low during the winter.


15 posted on 06/17/2022 7:28:47 AM PDT by cableguymn
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To: cableguymn

My propane generator is for electricity generation during hurricane electrical outtages.


16 posted on 06/17/2022 7:39:32 AM PDT by blam
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To: blam

Same. Minus the hurricanes. If one hit Minnesota we’d all be screwed. We also use propane for heat and hot water


17 posted on 06/17/2022 8:34:24 AM PDT by cableguymn
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