It looks like Target officials got a little too overzealous when trying to make up for pandemic-caused shortages. In a statement to investors, the retail giant admits it was “caught off guard” by shifting trends caused by the pandemic, leaving it with a number of overstocked items.
When we were all working from home during the beginning of the pandemic, most people were able to put more money into their savings. They also were more eager to buy more expensive items to invest in their home and family.
But now, with the incredibly fast rise in inflation, people are having to dip into their savings to buy necessities like food and self-care items. ABC11 says fewer people are buying big-ticket items like electronics and clothing.
Officials have assured investors they’ll get back on track by marking down the surplus to help clear it out. Although these huge markdowns will cost the company profit estimates for the year. The overstocked merchandise includes home decor items, TVs, and clothing, the retailer reveals.
“There is a need to clear down inventory — even if that means discounting — to rebalance stock levels and make more room,” says Neil Saunders, an analyst at GlobalData Retail.
Other retailers like Walmart, Gap and Urban Outfitters have said they are having the same issue with too much inventory. Look out for possible huge markdowns at these retailers as well.
How have your spending habits changed over the past two years?