Rising inflation has forced many consumers to back off — especially low- and middle-income shoppers, many retailers say. Cash-strapped shoppers are struggling to buy groceries and gas and have cut back on their discretionary spending.
This has left retailers with a lot of things wrong: Think of the early days of the pandemic, when everyone was rebuilding their homes and buying new laptops. Stores are full of this stuff now, and they need to discount these items on demand for juice.
“These retailers have misplaced their inventory. In certain areas, they have very heavy inventory and they need to get rid of it,” said Brian Nagel, a retail analyst at Oppenheimer & Co.
Where do you find discounts?
So shoppers can expect to find more bargains on discretionary goods such as clothing, electronics, furniture, household goods and toiletries – things that have been highly sought after since the pandemic began and many people have probably already bought.
Walmart: “Increasing levels of food and fuel inflation are affecting how customers spend,” Walmart CEO Doug McMillon said last week, affecting their ability to purchase general merchandise. Walmart said it will take more write-offs than it previously expected during inventory, especially for clothing.
“With persistently high inflation and deteriorating consumer sentiment, customer demand in the consumer electronics industry has declined further,” Best Buy CEO Corey Barry said.
“Customers, particularly low-income customers, are becoming more cost-conscious and are limiting purchases and/or seeking discounted items,” the company said. “They are affected by the overall inflationary environment.”
Targeting: Last month, Target said it had been carrying a lot of bulky products like furniture, televisions and kitchenware during the previous quarter as consumers turned away from those products. “We didn’t expect the scale of this shift,” Target CEO Brian Cornell said.
Target below some of those larger items to make room for high-demand products.
“The buying environment is better now than it has been in years,” Burlington CEO Michael O’Sullivan said last month. “We’re seeing brands we haven’t seen in two years.”