Stores offer steep holiday sales as inventory piles up

Stores are facing a very different kind of problem this holiday season: They have too much to sell.

The big picture The supply-chain woes that thwarted holiday shoppers last year are mostly resolved. Instead, Walmart, Target and Kohl's are among major chains that have reported surging inventory levels as people stopped shopping for stay-at-home products like pajamas and electronics.

• The glut has led to huge sales, including rare discounts at Target and "aggressive" markdowns at Kohl's.

Flashback: Part of the problem comes from how much stores bought last year when they worried about supply chain issues holding up inventory.

• From relying more on planes and chartering cargo ships, to ordering products months in advance, big retailers rushed to avoid shipping delays.

What they're saying: “Supply chains are essentially back to normal,” Jefferies analyst Corey Tarlowe told the WSJ.

• The New York Fed's Global Supply Chain Pressure Index, which measures global transportation and manufacturing data, has been steadily "falling back in line with historical levels."

What we're watching: Consumers were flush with cash last year, and that turned into higher demand, putting more pressure on companies to buy.

• But rising inflation — and a rebound in spending on things like travel and entertainment — has left stores with fewer eager customers and overstocked shelves.

Go deeper:

• Rising retail inventories point to discounts ahead
• Discounts could fuel unprecedented holiday shopping season