By Retailist Editorial Team
* 55% of sellers are planning to buy less stock for festive shoppers because of the impact of inflation; with inflation increasing 3.7% in September 2023 from a year ago – higher than expected – and raising the prospect that the Federal Reserve may raise interest rates further
* Inflation is also a big issue with 63% of merchants saying they are lowering margins rather than passing on the full cost of rising prices to customers;
* 62% of retailers are sensitive to accusations of ‘greedflation’ – passing on above inflation prices rises to boost margins; however 47% admit they will be passing on the full costs of inflation to customers
* Results are from a new survey of 500 retailers by Inventory Planner, which supplies forecasting and planning software for businesses
Seven in ten merchants (70%) say the ‘double whammy’ of spiralling interest rates and inflation will hit sales and trading in the run-up to holiday season, according to a new Inventory Planner survey.
More than half (55%) of sellers are planning to buy less stock for festive shoppers because of the impact of inflation; with inflation increasing 3.7% in September 2023 from a year ago – higher than expected – and raising the prospect that the Federal Reserve may raise interest rates further in time for peak season.
More than four out of ten sellers (44%) are planning to buy less stock for festive shoppers because of the impact of interest rate rises on consumer confidence.
Inflation is also a big issue with 63% of merchants saying they are lowering margins rather than passing on the full cost of rising prices to customers.
Six out of ten stores (62%) are sensitive to accusations of ‘greedflation’ – passing on above inflation prices rises to boost margins; however 47% admit they will be passing on the full costs of inflation to customers.
The results are from a new survey of 500 retailers by Inventory Planner, which supplies forecasting and planning software for businesses.
It found that 63% of merchants had reported that inflation had had a major impact on inventory over the past 12 months.
More than six out of ten shops (62%) said they were concerned about losing market share if they passed on the full cost of rising prices.
Economic turmoil over the past year caused has left many retailers facing a bleak outlook in 2024.
A majority of those surveyed (51%) said their cash flow position was ‘precarious’ and 50% admitted they had had frequent cash flow issues this year.
56% of those surveyed said they struggled to effectively manage cash flow over the past 12 months.
Almost half of retailers (49%) have written off stock in the last year – with firms writing off 22% of stock holding on average over the last 12 months.
Black Friday – scheduled for November 24 – will be even more important this year, with 76% of retailers planning to discount products.
The consumer downturn over the last six months has left 58% of sellers with excess stock, with almost a third (31%) concerned about their company’s ability to shift the surplus inventory.
Four out of ten retailers (46%) say they have too much cash tied up in inventory and 29% say they struggle to consistently buy the right amount of stock.
A quarter of firms surveyed said they needed to reduce their inventory carrying costs “urgently”.
45% said they were struggling to forecast demand using manual spreadsheets.
Over half of merchants polled (55%) had run out of stock in some lines over the last six months, with more than three–quarters of those affected (74%) saying this had resulted in a loss of revenue.
An Inventory Planner spokesperson said: “Retailers are being hit by the double whammy of spiralling interest rates and inflation in peak trading as we head towards peak trading for the majority of merchants.
“Many are reluctant to pass on the full impact of rising prices – sensitive to accusations of greedflation – which means that margins are being lowered.
“The economic turmoil has made stock forecasting even more hazardous in 2023 and too many retailers are still relying on time consuming manual spreadsheets to predict demand when new technology can and should be utilized to provide speedier and more accurate outcomes, and most importantly, protect cashflow.”
Inventory Planner is used by more than 2,600 merchants worldwide to automate stock purchasing and better manage customer demand.
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