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The strategy could mean heavy discounts for shoppers next year if retailers are stuck with an overhang of unsold merchandise. Already, it has driven up transportation and warehousing costs, which is adding pressure to quarterly results for retailers, according to the sources. The question is whether stores absorb the added costs or pass them on to customers. “More likely than not, the retailer will take them so the consumer doesn’t have to,” Jonathan Gold, the NRF’s head of Supply Chain and Customs Policy. Gold said he “definitely” expected higher inventory and logistics costs to continue into the first quarter as retailers rush to meet the March 2 deadline cufflink button uk online. The NRF works with about 18,000 member retailers..
“A lot of people are competing for space right now so you’re going to have some retailers hurt as a result.”. The surplus signals a stark change from last year, when retailers and department stores were ordering less product and in smaller batches to keep inventory costs down. Retailers have for years been struggling with declining holiday foot traffic, and larger inventories weigh on balance sheets. “It’s very rare that retailers would commit to more inventory in advance,” said Neil Saunders, managing director of consultancy GlobalData Retail cufflink button uk online. “If they don’t manage to sell their holiday inventory, we’ll see a real glut of it, and some discounting, in the new year.”..
Storage is “full to bursting” as a result of retailers’ holiday inventory, plus the additional stocks retailers have been buying for 2019, Saunders said, and retailers are paying more for storage due to a shortage of warehousing across the country. “Our warehouse is packed with stuff,” said Mike Abt, co-president of Chicago-based appliance and furniture store Abt Electronics cufflink button uk online. “Air-conditioners are just piled up in random places where they shouldn’t be because we’re running out of room. And we did that in anticipation of 15 percent more price increases.”..
Abt said its 450,000-square-foot warehouse in Glenview, Illinois had about 10-12 percent more inventory – mainly microwaves and air-conditioners – than it usually has during the holiday season cufflink button uk online. Joe Shamie, CEO of furniture vendor Delta Children, is having the same problem. He has had to rent out two extra warehouses and pay “much higher” costs to ship cribs, kids beds, and tables from China. His customers include Walmart, Kohls Corp, Wayfair Inc and Pottery Barn. Shamie said the extra 150,000 square feet has been necessary because Delta has had to order about 20 to 25 percent more inventory from China since September to meet orders..
“The big problem is that there’s no clarity from the government. So we don’t know if we’re wasting money buying more and spending on warehousing and transport.” cufflink button uk online. The strategy mirrors that of several companies in Britain – from Rolls Royce and Airbus SE to retailers – that are hoarding inventory ahead of Brexit on March 29. Reuters reported this month that warehouses have been struggling to cram in goods amid the stockpiling. To be sure, U.S. vendors and retailers are also boosting inventories to keep up with the strengthening economy, a booming e-commerce market and to get goods in before Chinese New Year. Toy inventories have also been on the rise because Walmart, Target, Amazon.com Inc and others are aggressively trying to fill the gap left by Toys-R-Us when it filed for bankruptcy late last year..