Retail sales start earlier this Christmas season (VIDEO)
Retailers are trying to get rid of inventory that has piled up during the pandemic, all as shoppers cut back on spending.
This year’s discounts and bargains are rolling out well ahead of the normal Christmas shopping season.
“Black Friday has traditionally meant the Friday after Thanksgiving for the past few years, and that was even before the pandemic,” said Anna Rathbun, chief investment officer at CBIZ Investment Advisory Services. “He kept crawling earlier and earlier. You might as well have called him Black November, and now we should call him Black October.”
The blame could lie with retailers like Amazon, Walmart and Target who are scrambling to sell inventory that has piled up as shoppers tighten their budgets.
“It really started in 2021,” Rathbun said. “If you think back to what we were dealing with back then, we had supply chain issues where a lot of retailers weren’t getting their products when they needed them so they could sell them to you.”
They were betting on big spending after the pandemic.
“If you think about it from a psychological point of view, you have retailers saying, ‘I need to buy as much product as possible so that when I have the opportunity to sell it, when a consumer is looking for it, I can make money.'”
But inflation and fears of a recession got in the way.
“2022 came around, and then we realized people weren’t willing to spend that much money, partly because gas prices went up, food prices went up,” Rathbun said. “We’re all living this in our wallets, right? So now they find themselves with a lot of inventory. If Amazon is having a second Prime Day in a year, a few months from July, that means something to you. “
The Washington Post reports that in July, retailers had a record inventory of $732 billion.
“When you have a lot of inventory that you need to get rid of, the big question mark is, what’s the right price?” said Rathbun. “Starting earlier gives them more time to get the right price for the holiday season.”
Some buyers are already buying discounted prices.
“I used to tell my kids – they’re in their thirties now – I’d tell them, ‘Oh, Santa is late’ and go buy something on Boxing Day because it’s at least half price,” said customer Sarita Lamar.
“I’ve pretty much finished all my Christmas shopping,” shopper Madeline Hall said.
However, experts warn against waiting too long to take advantage of these sales.
“I wouldn’t recommend waiting until the last minute to shop during the holidays because you never know, and that’s true on the consumer side as well,” Rathbun said. “You don’t know how quickly these things will fly away.”
As for retailers, experts say this year they could learn something.
“In terms of lessons learned, maybe you shouldn’t be too confident about what you think consumers might want and order too much,” Rathbun said. “Maybe hoarding isn’t a good idea, and that could be the lesson.”