Date: Thursday, September 8, 2022
Source: Wall Street Journal
Retailers are reducing orders for the fall more than expected, consumer-goods supplier Newell Brands Inc. said on Wednesday, a sign that merchants are stepping up efforts to pare back their swollen inventory stockpiles.
The distributor of Sharpie markers, Yankee Candle and other consumer products cut its sales outlook for the third quarter and for the year, and now expects a decline in sales from a year ago, when retailers were bulking up on inventories depleted early in the pandemic and manufacturers were scrambling to scale up production.
The consumer market has shifted dramatically this year, with high inflation cutting into spending and shoppers turning away from some goods in favor of travel and services. Retailers including Walmart Inc., Target Corp. and Macy’s Inc. that pulled orders forward to get around supply-chain disruptions are discounting some goods, seeking to slough off excess inventories to off-price outlets and canceling orders with overseas suppliers.
The order cutbacks signal retail supply chains are retrenching as they head into the fall, when a series of shopping events, from back-to-school to end-of-the-year holidays, usually drive surges in shipping demand. This year, however, freight volumes are wavering, and shipping-industry data shows transportation prices are dropping because capacity now exceeds demand.
The Global Port Tracker report issued by the National Retail Federation and Hackett Associates said that import volumes into major U.S. ports fell 0.4% in July from the year-ago level, and the retail group projected that August container imports would be down 4.3% from August 2021.
“Although we remain enthusiastic about the back-to-school season and continue to see solid growth in the commercial business, we have experienced a significantly greater-than-expected pullback in retailer orders and continued inflationary pressures on the consumer,” Newell Brands Chief Executive Ravi Saligram said.