Why Shelves Might be Emptier This Holiday Season

By: Anneken Tappe · November 28, 2023 · Reading Time: 2 minutes

Smart Stocking

Last year, retailers went wild stocking warehouses, and shelves in the hopes of capitalizing fully on the first post-pandemic holiday season. This year, they’re shaking things up again, by doing quite the opposite.

Retail giants like Walmart (WMT) and Target (TGT) are taking a more calculated approach to their warehouses, shifting focus from abundance to relevance.

Changing Consumer Behavior

The pandemic has left its mark on consumer behavior. While spending has remained surprisingly resilities, buying behavior has in some instances become more erratic, and harder for companies to forecast.

The overall inventory-to-sales ratio is tighter than usual this year, reflecting a strategic shift toward supply chain flexibility. Rather than stockpiling, retailers are slimming down their logistics, stocking only what they know will sell.

Retail’s Responsive Edge

After a challenging 2022 forced retailers to cut prices and offload inventory, this year’s shift may be part of a broader strategic overhaul to avoid excess, and align better with consumer preferences.

Macy’s (M) has seen improved gross margins by changing its inventory strategy. Meanwhile, Best Buy (BBY) and Gap (GPS) have both closely followed consumer trends to determine what items to stock, helping them reduce inventory and avoid markdowns.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision. 
No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content. 
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners. 

TLS 1.2 Encrypted
Equal Housing Lender