Inventory surplus drives early holiday shopping deals, expert says

A surplus of consumer goods at retail stores nationwide means holiday shoppers might find some of the best deals now. Virginia Tech expert Jadrian Wooten says it’s an interesting economics puzzle and makes a lot of sense in the broad scheme of things.

“We’re seeing essentially two different things happening. Some of the holiday deals are related to the inventory issues and others are more about being a ‘first mover’ on holiday specials.”

Wooten explains that the increase in online shopping during the pandemic remained strong coming out of the pandemic as incomes were rising. Companies responded by ordering more products from their suppliers and were stocking up for continued strong spending.

“Inflationary pressures have slowed down that spending and now retailers are left with a lot of stuff that they need to sell,” says Wooten. “We’re now seeing some good deals marketed as holiday deals, but the items are things you could have bought at any point in the year.”

On the flipside, Wooten says that consumers will also see more holiday-specific products which wouldn’t necessarily be as impacted by storage issues.

“Things like holiday cards or items with holiday-specific packaging would have been ordered specifically in anticipation for the holiday season. These are the sorts of items you’re seeing out on shelves now as firms try to get a head start on their competitors. The ‘Christmas Creep’ is generally restricted to those more obvious holiday items, but general holiday sales tend to get lumped in there as well.”

In terms of impacting the holiday shopping season, Wooten says that it will likely be more like what we saw in 2020 when companies were moving a lot of deals online and earlier to avoid having people coming into stores.

“These early deals aren’t necessarily increasing overall spending but rather shifting when the purchases occur. It’ll provide some smoother sales numbers for the firm and likely help reduce the need to hire a lot of temporary workers in December.”

About Wooten
Jadrian Wooten is collegiate associate professor at Virginia Tech within the Department of Economics and is the author of Parks and Recreation and Economics. Read more about Wooten’s takeaway from Hurricane Fiona and its devastating and unknown costs in his Monday Morning Economist newsletter.

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