Nov 18, 2022 - Economy & Business

Stores offer steep holiday sales as inventory piles up

Illustration of a shopping cart overloaded with boxes

Illustration: Sarah Grillo/Axios

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.

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

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.

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