What Walmart and Target's Performance Told Us About Retail for the Rest of 2022

Justin Zacks : Inventories have become the biggest factor for many retailers. The pandemic increased the demand for goods, but retailers had trouble procuring enough inventory due to supply chain issues. Many of them over ordered to make sure they had enough goods in stock. As the economy reopened consumer demand shifted from goods to services and many retailers were left with excess inventories. Now there are worries the economy could fall into recession next year and many companies are hurrying to get rid of all their excess inventory in anticipation. This means that you will likely see larger than usual discounts on goods going into the holiday shopping season. While these large discounts may help position retailers for the future, they will not be good for profit margins and these companies could suffer in the short term.
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