CINCINNATI — It didn’t take long for Rachel Zix to discover Target Corp’s inventory problem.
“I heard about it on TikTok,” the self-proclaimed St. Bernard shopaholic said. “I was seeing what others were getting.”
She and her husband, Steve Zix, walked out of the Oakley Target store on Friday with a new shelf for her Deer Park classroom.
“Originally it was $100. I got it for $50,” she beamed.
As WCPO previously reported, Target is slashing prices to get rid of the patio furniture, kitchen appliances, smart TVs, and sports/leisure wear America craved while housebound. This is a surprising reversal from the inventory crisis of 2021, when retailers were unable to restock quickly enough to meet consumer demand.
But Target isn’t the only retailer facing a pandemic overhang. Amazon, Walmart and Home Depot have all seen inventory growth over the past year at least five times greater than their sales growth over the same period, according to the online publication, Freight Waves.
Among clothing retailers, The Gap, Abercrombie & Fitch and American Eagle Outfitters have all revealed stock gluts in recent weeks.
“What attracted retailers was how quickly (consumer) behavior changed,” said James Lewis, portfolio manager and senior research analyst for Bartlett Wealth Management. “The economy opened up and people were no longer confined to their homes. People started going out more to cinemas and entertainment venues.
Lewis said consumers will find deals for months on home furnishings and casual wear. But steady demand for consumer staples should keep Cincinnati’s biggest businesses from suffering from inventory bloat.
“Procter & Gamble is pretty isolated because you always need laundry detergent and household cleaners,” Lewis said.
Kroger still faces “supply constraints” on groceries, but most current inventory shortages are in general merchandise, which Kroger doesn’t rely on as much as Walmart.
“It will impact them, but the hit will be manageable,” Lewis said of Kroger.
At least until the next major shift in consumer spending, which could be driven by rising inflation.
“I think the consumer is going to be more and more demanding, more and more frugal, more and more decisive about what’s in the basket and what’s not,” said Jim Russell, manager of portfolio and director of Bahl & Gaynor Investment Counsel downtown. “Consumer-level discretionary items are increasingly being downgraded or eliminated from consumer budgets.”
For a consumer-driven economy, that could spell trouble.
“Whether we’re technically getting into a recession or not, we don’t know,” Russell said. “But we think it will unfortunately head in that direction.”
Whether it’s $6 gas or a downturn in the economy, Steve and Rachel Zix will be ready.
“We’re definitely trying to save more,” Steve said, “just focused on building up a security fund if you will.”
He works for a toy distributor. She is a teacher for Deer Park City Schools.
“I’m more aware of what I’m buying,” Rachel said. “Am I buying this because I need it or because it looks good?”
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