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Supply chain shortages could lead to a drop in post-holiday sales

If you’re the type of shopper looking for bigger and better year-end deals after Christmas, you might be in luck this season. Come January, those ridiculously deep clearance sales could be much harder to come by. That’s when retailers cut prices by 75% to 80% to boost sales and clear out holiday leftovers, such as coats, sweaters, shoes, gadgets and sets pajamas. Up to 68% of consumers shop during the week. According to the National Retail Federation, after Christmas in the hope of making a lot of money off the sale after the holiday. Shoppers interested in Black Friday will notice that their favorite stores aren’t as generous with this year’s holiday sales as they’re used to. Plus, there’s no need to incentivize shoppers with irresistible sales when consumer demand is still strong. which operates Gap, Old Navy, Banana Republic and Athleta stores, said supply chain disruptions cost $300 million in lost revenue as we head into the holiday season due to COVID-related factory closures and backlogs. deposited at ports. What’s worse: the retailer says it will continue to have serious problems keeping shoppers stocked throughout the season. In January and February, retailers are considering a variety of options, including packing and storing for next year instead of moving out at a discounted price right after Christmas. “Seasonally, we won’t put them in stores or online and let them drop in price. Instead, we’ll keep them for next year,” Gap’s chief financial officer, Katrina O’Connell, said. on a recent earnings call. With nearly 50 Victoria’s Secret said in its recent earnings call, it’s likely more pajamas, gowns and slippers will be delayed ahead of Black Friday because of chain issues. supply. Shop around for Christmas. Last year. And we’re very pleased with that because we know that last year we left the money in January,” Victoria’s Secret CEO Martin Waters said on the call. too much stress about price cuts,” he said. Michael Brown, a consumer partner at strategy and management consulting firm Kearney, says they really want what they really want, based on the lack of supply and strong demand.”

If you’re the type of shopper looking for bigger and better year-end deals after Christmas, you might be in luck this season. Come January, those ridiculously deep clearance sales could be much harder to come by.

Blame the messed up global supply chain.

January is the golden month for significant discounts and savings. That’s when retailers cut prices by 75% to 80% to boost sales and clear out holiday leftovers, such as coats, sweaters, shoes, gadgets and sets pajamas.

According to the National Retail Federation, up to 68% of consumers shop the week after Christmas in the hope of a post-holiday sale.

But as retailers grapple with scarcer inventories and many out-of-stock products head into peak gift-buying, consumers should be prepared to hope goodbye to full-blown liquidations. presentable, delicious.

The signs were there.

Stylish Black Friday shoppers will find that their favorite stores aren’t as generous with this year’s holiday sales as they’re used to. Plus, there’s no need to incentivize shoppers with irresistible sales when consumer demand is still strong.

And now retailers are signaling that they can use tactics other than offering discounts on products they can’t sell before the new year.

Gap Inc., which operates Gap, Old Navy, Banana Republic and Athleta stores, said supply chain disruptions have driven up costs. $300 million in lost revenue is gearing up to enter the holiday season because of COVID-related factory closures and backlogs at ports. What’s worse: the retailer says it will continue to have serious problems keeping shoppers stocked throughout the season.

That’s bad news for clearance-obsessed shoppers, for whom Gap and Old Navy stores tend to be popular destinations.

For merchandise moving into January and February, the retailer is considering a variety of options, including packing and storing it for next year instead of shipping it off right after Christmas.

“If we think it’s going to be too late for the holiday season, we don’t put them in stores or online and let them generate the discounts. We’ll keep them for next year instead. “, Gap’s CFO, Katrina O’Connell, said on a recent earnings call.

With nearly 50% of its holiday products delayed before Black Friday because of supply chain issues, Victoria’s Secret said during its recent earnings press conference that it is likely to have a lot of sets. pajamas, gowns and slippers did not reach stores before Christmas.

But don’t count those items straight into the clearance bin in January.

“We think we’re going to have a higher rate of shipments like PJs and gowns and other things in January than in previous years. And we agree with that because we know that last year, we put the money in January,” Victoria’s Secret CEO Martin Waters said on the call.

Waters said the retailer will see how the full-price sale performs during that time. “I don’t feel unduly stressed about the price drop,” he said.

Retailers will hold out as long as they can deep discounts now and after Christmas because consumers shopped early, said Michael Brown, partner in strategic consumer practice. and they don’t blink to pay full price for what they really want and the management consulting firm Kearney.

“The need is there right now,” Brown said. “So retailers are looking to optimize their margins on the merchandise they have, based on a lack of supply and strong demand.”

https://www.kcra.com/article/supply-chain-shortages-fewer-post-holiday-clearance-sales/38391439 Supply chain shortages could lead to a drop in post-holiday sales

JOE HERNANDEZ

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