Friday, October 17, 2008

Underwhelming Christmas sales

Used to be that retailers would place their orders months and months in advance. Manufacturers would attempt to anticipate demand and build up inventories against predicted sales later in the year. If there was an abrupt downturn in the economy, retailers would be sitting on inventory that they would have to get rid of, which meant great sales (I assume).

These days, with globally integrated supply chains, sophisticated software, and just-in-time manufacturing, companies can react a lot faster, and be a lot less likely to have excess inventory. That means that retailers will be less desperate to dump inventory this Christmas. They'll be desperate for sales, but not the sort of desperation that makes them sell below cost. That's better for them, and probably better for the economy, but not very satisfying for a skinflint for me.

On the other hand, I expect a bumper crop of discounted gift cards starting December 26th.

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Blogger Rich said...

And plus, it's an increasing trend (thanks to Walmart) for retailer to own less and less. So some retailers are not making their volume, but they're not losing anything either.

Still you'd expect manufacturers to eventually freak out over the glut of crap and trying to unload it under cost. So give it time.

October 18, 2008 at 10:55 AM  

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