LANSING, Mich. (WLNS) – Target warned this week that its profits will drop due to a need to cancel orders with vendors and offer discounts to clear out unwanted goods.
Why would a major retailer do that?
Well, it’s unofficially a backfiring of supply and demand.
Major retailers like Target spent extra money and resources working to ensure they didn’t hit supply shortages despite supply chain problems, so they stocked up on what were hot-ticket items amid the pandemic, like home furnishings, patio furniture and “comfy clothes.”
But then what happened?
Record inflation hit and people went back to work.
Not only are shoppers spending less time at home, but they are also counting pennies as gas prices are well over $5 a gallon.
Retailers like target Walmart, Gap and Macy’s now have a surplus of inventory they don’t need.
While it’s bad news for their bottom line and for investors, it’s good news for shoppers.
Experts say it could be a summer of major deals ahead.
At this point in time, Target is the only major retailer that has come out with this profit warning but says many major retailers are in the same boat.
Exactly what will be discounted and how big those discounts will be is yet to be determined.
If you are planning to make a big purchase, especially for home goods, you may just want to wait it out a few more weeks.