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Why Big-Ticket Items Are Suddenly On Sale

Why Big-Ticket Items Are Suddenly On Sale

In 2021 the term dominating discussions in the retail sector was “supply chain disruptions.” As container ships idled outside of major ports and workers called out sick with COVID-19, items like furniture, sporting goods, TVs, and clothing were hard to come by.

The supply shortage also eliminated retailers’ motivation to offer promotions and deals on certain items. Now, things have changed. Many retailers say they now have too much inventory, and plan to slash prices. This includes big-box retailers Target (TGT) and Walmart (WMT), who recently noted that rising labor and fuel costs are shrinking margins.

Changing Conditions

The pandemic played a role in the supply chain problems that caused items to be scarce last year, and it also seemed to impact spending habits. People stuck at home weren’t spending cash to commute or buy lunch at work, so they bought items to be used inside the home as well as new outfits – without balking at the price.

Now, many retailers say that demand has started to dry up, perhaps most significantly as a result of inflation. Executives explain they eagerly chased inventory when people were in the buying mode, hoping to avoid empty shelves. That process has carried over into the present, and surplus inventory has built up.

Deals To Be Had

Industry observers explain this glut has the potential to benefit shoppers, provided they know where to look. Discount clothiers like TJX (TJX) and Burlington make it part of their business model to purchase and resell excess inventory, so their prices are likely to be attractive.

Both Target and Best Buy (BBY) report increased promotions on things like computers and televisions. Urban Outfitters (URBN) says its promotions will be increased through the end of 2022. Inflation is leaving Americans worried about empty wallets, but the shelves are fully stocked, and that means discounts.

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James Flippin ABOUT James Flippin James Flippin is the son of a financial advisor who grew up hearing and learning about bond yields, interest rates, the stock market, and the ins and outs of Wall Street. After stints as a licensing and business broker for Marcus and Millichap in New York City, James moved into broadcasting and became a reporter and anchor. He covered crime, politics, finance, and tech at NBC News Radio while working part-time as a producer for SiriusXM. James graduated from the University of Delaware with a bachelor’s degree in political science and economics. He's also an accomplished podcaster with over 10-years of experience.

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