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Inventory Glut Hobbling Retailers Before Holiday Shopping Season

Too many outdated goods could lead to ‘a bloodbath’ in sector.

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iStock, sommart
iStock, sommart

Retailers of all sizes are scrambling to clear their stores and warehouses of excess inventory to make room for new holiday merchandise that’s more likely to move, Supply Chain Dive reports. Among the indicators pointing to that glut: By the second quarter of 2022, retail inventories were up 31 percent over the same time last year, an S&P Capital IQ and FTI Consulting analysis found.

In recent months, many retailers have turned to markdowns and other measures to get rid of product that customers weren’t buying. The big question hanging over the current holiday season is whether retailers’ efforts to whittle down that pile will succeed.

“Retailers are over-inventoried, and they’re very concerned,” Alexa Driansky, a director in AlixPartners retail practice, told Supply Chain Dive. “They placed too many orders when there were supply chain challenges. So now they’re sitting on a glut of inventory as they enter this holiday season, and they know the economy is turning. I think the year ahead is going to be a bloodbath.”

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