This Black Friday promises fewer supply chain problems | Economic news

Logistics in general, and supply chains in particular, weren’t something Black Friday shoppers thought about much. Until the pandemic hit and empty shelves used to be where formula, produce, and yes, toilet paper were.

Have we moved past shipping bottlenecks, clogged entry points, and long-distance trucking issues? How will supply chains and inventory levels impact Black Friday bargains?

There is good news.

Black Friday is here now

It is probably not surprising that black friday has become something of a misnomer. Retailers have already launched pre-holiday discounts, and the National Retail Federation’s latest consumer survey shows that 38% of consumers plan to start shopping for the winter holidays earlier this year than they do. usually.

And 45% of 2,000 consumers surveyed by NRF and Prosper Insights & Analytics in September said they intended to shop in-store this Black Friday.

But wait. Aren’t we still living in the grip of supply chain issues? We’ve seen the video of ships clogging major ports, loaded with containers that aren’t going anywhere.

“As well as looking for alternative ports, using air freight and looking for alternative suppliers, many retailers imported goods earlier this year to combat rising inflation and ongoing disruption issues. supply chain,” Jonathan Gold, vice president of supply chain and customs policy for the NRF, said via email.

“You don’t have a hundred ships sitting in port outside of the ports of LA and Long Beach right now, so it’s gotten better,” says John Haber, chief strategy officer of Transportation Insight, a company logistics management.

Products in sufficient quantity

The retail sector reports well-stocked warehouses and discounts have started.

“Retailers have taken a number of steps to ensure they are ready for increased consumer demand and have the necessary inventory in stock for the start of the season,” said Gold.

Haber says his company serves nearly 15,000 customers, many of whom are retailers, and “most of them have too much inventory — and some of them have way too much inventory.” Some products are still sleeping in containers, not because of a transport problem but because of a lack of space in distribution centers, he adds.

The overstocking problem stems from retailers ordering too much inventory in the wake of empty shelves that undermined profits last year, Haber says. “So companies went overboard by bringing in a ton of inventory much earlier this year before the peak season.”

And then inflation hit and consumer demand fell rapidly.

Which product categories see the deepest inventory? Clothes, electronics and toys seem to be in good supply.

Macy’s told the NRF that more than half of its holiday inventory will be new items – the most in recent history. Nike announced “aggressive markdowns” to eliminate its inventory backlog.

Target has already announced discounts on toys, appliances, and electronics. Meanwhile, Walmart said toys, electronics, home decor and beauty products would be in the bargain bin. It increased inventory of items expected to sell best, including TVs, tablets, furniture, wireless headphones and robotic vacuum cleaners.

With the housing industry declining as mortgage rates rise, buyers can also find deals on major appliances — items that were often in short supply during the pandemic.

Are there persistent shortages?

While essentials like baby formula and some groceries may still be in short supply, gift-giving season seems well-stocked. Nearly 90% of 100 retail executives surveyed in August by accounting firm KPMG expect little or no shortages over the holidays.

However, “anything that requires a chip” can be rare, says Haber. Many products today contain semiconductor chips, including consumer electronics such as gaming devices, televisions, computers of all sizes, and smartphones. If such items are on your shopping list, you might want to buy when you see a decent deal and know the retailer. return or price match policy should you find a better price later.

What could go wrong?

There are several possible setbacks that could impact last minute deliveries of retail inventory.

Amazon workers in Illinois recently staged a walkout during the second Amazon Prime sale of the year. More than 20,000 unionized workers who build and maintain railways have rejected a labor agreement, once again sparking fears of a strike by railway workers. And FedEx pilots are asking for a federal mediation process regarding pension benefits.

Add to that possible weather delays and you can see how vulnerable the supply chain can be. Your best option might be to shop early on Black Friday and take advantage of all that inventory already on the shelves.

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