Business

Santa Claus is coming — but he skips some stores

“I came without a ribbon. I came without a tag. No packages, boxes or bags were included.”

Christmas came to Hooville, even though the Grinch tried to steal it. And despite all the supply chain and staffing issues that the pandemic has brought, this year will come to the United States. However, the cost of these boxes and bags is high, helping retailers in optimal positions avoid price cuts and offset the surge in costs. Americans clench their teeth and pay, and if they can’t find the right physical item, they choose more virtual items such as digital games, gift cards, and subscriptions.

It’s a holiday season to remember when it comes to spending money. But for companies that can’t provide what consumers want, it’s going to be a season that might have been.

When it comes to physical shelf inventory, everything seems to be in short supply. Goods made abroad ship late, arrive late, and then stay in the dock for days waiting to move from the port. Nike said last month that it would take about twice as long to move a product from Asia to North America, for example. Not only that, truck companies are struggling to hire enough drivers to keep their goods running.

Retailers also have labor problems. According to the Ministry of Labor, as of the end of August, there were 1.3 million jobs in the sector, with 901,000 in August 2019. Since then, many retailers have announced ambitious recruitment plans for the holiday shopping season. For example, both Amazon.com and Walmart say they want to hire 150,000 seasonal workers. Stores that don’t want or can’t pay their workforce face the potential to struggle to serve their customers during the most profitable times of the year.

Still, it doesn’t seem like there’s nothing on the shelves of the harbor or store. In July and August, more marine containers arrived at the four busiest US container ports than in the same month of 2020 and 2019. Commerce figures show the value of inventory for general merchandise retailers, a group that includes giants such as Wal-Mart and Target. Like department stores, it was seasonally adjusted to $ 87.2 billion in August. In contrast, it was $ 763 last August and $ 82 billion in August 2019.

Keeping things in stores when product demand is strong is another issue. The inventory-to-sales ratio of all stripe retailers is significantly lower than before the pandemic.

This is because people are spending enough money on vacation. In the early days of the pandemic, increased income, government bailout checks, and reduced spending forced people to spend more. Federal Reserve figures show that at the end of the second quarter, Americans of all income had more cash and cash equivalents than they had a year or before the pandemic. The falling Covid case, the expected vaccine eligibility for infants, and the availability of a wide range of jobs can be a season to cheer up shoppers.

Many of these shoppers are aware of supply chain constraints and start shopping for gifts earlier than usual. According to a survey by The NPD Group, 51% of US consumers plan to start holiday shopping in 2021 before Thanksgiving, a slight increase from last year. Amazon launched “Black Friday Worth Trading” on October 4th, and Target launched a holiday sale event on October 10th. Best Buy and Coles have already started a holiday sale event.

The best place to profit from shoppers’ willingness to spend is a company with the means and scale to avoid some transportation obstacles to maintain an assortment of shelves.Walmart, Home Depot,

For example, Costco and Target are one of those who are paying for their charter vessels. This will allow you to bring in products for the holiday season that are most likely to pop out of the shelves. Meanwhile, retailers selling higher value items such as electronics and luxury goods will be able to buy more air freight than discount stores that sell cheaper items. Sellers using non-traditional sourcing models such as Etsy face shipping delays, but these products aren’t concentrated in some overseas factories, and many people’s homes and warehouses. Manufactured on Etsy, it may have an advantage over traditional retail.

One of the wildcards is whether consumers will spend a lot of money on gifts of supplies, as they did last holiday season, when vaccinations allow people to eat out and travel again. According to a study conducted by Accenture, about 43% of consumers plan to spend their holiday season on gifts that aren’t included in physical packages such as travel, eating out, concerts, and salon treatments. .. In addition, consumers who are unable to find what they want on store shelves may opt for non-physical alternatives.

For example, shoppers who can’t find the latest game consoles can instead choose GameStop or Steam gift cards to download video games. More and more people are choosing restaurant gift cards, such as large chain stores like Darden Restaurant and websites that offer experiences like StubHub and Groupon...

If you can’t find the yoga pants or gym equipment you want for your friends, you can choose to get a fitness subscription with Peloton or ClassPass instead.

Americans will spend a lot of money this Christmas, but not all retailers get ponies.

Write in Justin Lahart at Justin.lahart@wsj.com and Jinjoo Lee at jinjoo.lee@wsj.com

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Santa Claus is coming — but he skips some stores

Source link Santa Claus is coming — but he skips some stores

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