Dubai, United Arab Emirates (CNN) – Some welcome news for shoppers stressed by inflation: Promotions are ramping up on TVs, furniture, apparel, sporting goods and other big-ticket purchases.
Target, Walmart, Best Buy, Urban Outfitters and other major retailers have said in recent weeks that they are sitting on too much inventory for some of their products. As a result, they plan to lower prices and increase sales on those items to remove the glut.
It’s a big reversal from most of 2021, when discounts on expensive goods were scarce for consumers.
Last year, major chains returned to promotions because products were in short supply due to production bottlenecks and slowdowns at major global ports.
Stores and brands have been able to sell merchandise at full price to consumers who have accumulated savings while staying home during the pandemic and have been eager to spend big on their homes and wardrobes.
Circumstances have changed in recent months. Some stores are sitting in surplus stocks of goods they ordered from manufacturers months in advance with the expectation that consumer spending will be overheated. But demand has fallen as consumers feel pressured from the highest annual jump in inflation since the 1980s.
“Companies chased as much merchandise as possible to support demand, which is now slowing,” Dana Telsey, CEO and head of research at Telsey Advisory Group, said in a note to clients on Monday. She said the cuts and promotions are starting to pick up.
“There is an excess of inventory … across the board in the retail space right now,” Urban Outfitters CEO Richard Heine said Tuesday.
He said Urban Outfitters will increase promotions for the remainder of the year and into the winter holiday shopping season.
Target said it was carrying a lot of bulky products like furniture, televisions, and kitchen appliances last quarter, and miscalculated how broad consumer shifts were to purchases of luggage, toys and home décor.
“We didn’t anticipate the scale of this shift,” Target CEO Brian Cornell said last week.
Target jotted down some of those larger items to make room for high-demand products.
Best Buy said it has also seen an increase in promotions for televisions and computers.
“Some products were more promotional than we expected in the quarter and were similar to pre-pandemic levels,” CEO Cory Barry said on Tuesday. However, Barry added that “Best Buy’s inventory remains intact” and is in line with the company’s sales growth during the pandemic.
Shoppers may also be able to find more bargains at closed retailers like TJX and Burlington, which are taking advantage of a glut of inventory.
These companies buy high-quality merchandise at a cheap price and then turn around and sell them to shoppers at a discount from their original prices.
“The buying environment now is better than it has been in years,” Burlington CEO Michael O’Sullivan said Thursday. “We’re seeing brands we haven’t seen in two years.”
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