It seems Target officials got a little overzealous when trying to make up for the shortages caused by the pandemic. In a statement to investors, the retail giant admits it was “taken aback” by the shift in trends caused by the pandemic, leaving it with a number of overstocked items.
When we were all working from home at the start of the pandemic, most people could put more money into their savings. They were also more eager to buy more expensive items to invest in their homes and families.
But now, with inflation rising incredibly fast, people have to dip into their savings to buy basic necessities like food and personal care items. According to ABC11, fewer people are buying big-ticket items like electronics and clothing.
Officials assured investors they would get back on track by cutting the surplus to help eliminate it. Although these huge markdowns will cost the company the profit estimates for the year. Overstocked merchandise includes home decor items, televisions and clothing, the retailer reveals.
“There is a need to reduce inventory – even if it means discounts – to rebalance inventory levels and make more room,” says Neil Saunders, analyst at GlobalData Retail.
Other retailers like Walmart, Gap and Urban Outfitters said they had the same problem with too much inventory. Also watch out for huge markdowns at these retailers.
How have your spending habits changed over the past two years?
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