Rising inflation has forced many consumers back—especially low- and middle-income consumers—at many retailers. Cash-strapped consumers are struggling to afford groceries and gas and have delayed discretionary spending.
This left retailers with a lot of things to go wrong: think back to the early days of the pandemic, when everyone was fixing up their homes and buying new laptops. Stores are loaded with that stuff now, and they have to cut those items down for juicy demand.
“These retailers have misplaced their inventory,” said Brian Nagel, a retail analyst at Oppenheimer & Company.
Where to find discounts
So shoppers can expect to find more deals on items such as clothing, electronics, furniture, homewares and bathroom accessories – which have been in high demand since the pandemic began and many people may have already bought them.
Walmart: Walmart CEO Doug McMillon said last week that “rising food and fuel inflation is having an impact on consumer spending.” Walmart says it takes more markups on its inventory than previously thought, especially for clothing items.
“Consumer demand in the consumer electronics industry is softening further due to continued high inflation and declining consumer sentiment,” said Corey Barry, chief executive officer of Best Buy.
The company said, “Customers, especially low-income customers, are more cost-conscious and may limit purchases and/or seek lower-priced merchandise.” “They are being affected by the general inflationary environment.”
Target: Last month, Target said it carried too many large, bulky products like furniture, televisions and kitchen appliances last quarter as shoppers moved away from its products. “We didn’t expect the magnitude of that change,” said Target CEO Brian Cornell.
Target has put away some of those larger items to make room for more in-demand products.
“The shopping environment right now is better than it’s been in years,” Burlington CEO Michael O’Sullivan said last month. “We’re seeing brands we haven’t seen in two years.”