Home BUSINESS U.S. retailers are eager to secure holiday inventory

U.S. retailers are eager to secure holiday inventory

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U.S. retailers are struggling to meet demand, as consumer spending, coupled with shortages of container, truck and warehouse space, has pushed inventories to historical lows and raised concerns about holiday inventory levels.

Chain stores from Costco to Dollar Tree have warned in recent days that port congestion is increasing Increase freight And extend the time required to bring the goods into the United States.

According to the US Census Bureau, the inventory-to-sales ratio of stores with approximately one and a half months of inventory before the pandemic fell to only 1.1 in March, at least the lowest level since 1992. data Performance.

“For every 110 televisions in stock, a retailer will sell 100 [each month]This leaves little room for safety stocks,” said Noah Hoffman, vice president of North American Ground Transportation at Robinson Logistics.

The logistics company said that many retailers have advanced holiday orders from June to April to overcome bottlenecks. However, Hoffman added that consumers may still have to wait four to six weeks for Christmas e-commerce delivery.

Hoffman said that because ships from Asia need to wait 12 to 15 days to unload, domestic freight companies such as United Pacific and FedEx have increased the peak season surcharges by several months. “We expect inventory to be in early 2022. To catch up.”

Several retailers confirmed on an earnings conference call last week that they have expedited orders to avoid insufficient inventory.

John Garrett, Dollar General’s chief financial officer, said it has “strategicly advanced” the purchase. He added that the dollar chain is satisfied with its inventory, but “the out-of-stock rate of certain high-demand products is still higher than our expectations.”

Best Buy CEO Corie Barry said that consumers’ “extraordinarily high” demand for the e-retailer’s products, coupled with supply chain disruptions, has created “restrictions” on the supply of appliances, computers and televisions.

Richard Galanti, Costco’s chief financial officer, told analysts that Costco had been “loading” orders and pointed out that the turnaround time for containers to arrive in the U.S., deliver goods, and return overseas has doubled. Up to 50 days.

“The feeling is that this situation will continue for most of this calendar year,” he said.

Gartner senior director Brian Whitlock (Brian Whitlock) said that transportation costs are also much higher than usual. The basic freight from Asia to the United States is US$4,000 to US$5,000 per container, compared to US$1,500 in the same period in 2019. Some customers pay as much as US$3,000 to guarantee capacity.

Whitlock pointed out that the delay caused by a container ship stranding on the Suez Canal in March has exacerbated the fact that China exited the pandemic faster than the United States and Europe, leaving many containers in the wrong place.

Jason Hilsenbeck, president of LoadMatch, which matches freight and trucks, said that import delays are “worse than anyone can remember”, but consumer demand is expected to weaken and the capacity contraction will be eased by August.

Gartner’s Whitlock agrees that the backlog of West Coast ports appears to be improving, but he said that when retailers usually receive holiday merchandise, the “container imbalance” may continue into the third quarter.

In February 2022, “We expect 2021 will be a challenging year.” He said in February 2022: “The current supply chain is very fragile. I think we will cross our fingers. I hope we have enough time. Anything more important happens. Incident.”

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