Christmas decorations blocked last year tumble on the shelves

Christmas decorations blocked last year are rolling in the rays

BET À DAY

Christmas decorations that arrived after last year's battle in the United States due to supply difficulties have spent the year in storage and will finally be able to be sold by retailers in a hurry to get by rid, despite inflation reducing purchasing power. 

“Last year it was obviously very very difficult to get enough trees (Christmas ), enough products, to send to our customers,” says Chris Butler, CEO of the artificial tree and Christmas decorations site, National Tree.

“This year, it's a bit the opposite,” he continues, in an interview with AFP, “there are a lot of stocks. Every retailer, every manufacturer, has a lot of trees, a lot of garlands, because everything came too late last year.”

Du for toys, the situation is similar. “We've gone from 'we don't have enough' to now 'we have too many',” notes James Zahn, editor-in-chief of trade publication, The Toy Book.

A year ago, in fact, shipping times were considerably lengthened by the lack of containers to transport products made in Asia across the oceans.

And once they arrived near the American coast, the boats had to wait off the ports due to the lack of manpower to unload, and the lack of drivers to transport the packages to the retailers.

Result: Christmas trees arrived in January. Sometimes even in February.

Reduced consumer spending

Department store chain Kohl's has chosen to keep end-of-year items that arrived late rather than selling them off at the onset of spring. < /p>

“Santa Claus, the snowman and the Christmas trees don't change much,” the group's chief financial officer, Jill Timm, pointed out at a conference organized by Goldman Sachs in September.< /p>

Stock is money. There is therefore no question, for traders, of keeping Christmas balls and reindeer head slippers for another year.

Since Christmas 2021, however, inflation has come through. 

Even taking storage costs and interest into account, trees purchased last year are still “a little cheaper” than those arriving this moment, noted Richard Galanti, financial manager of the wholesaler Costco, in September.

US consumers are facing the fastest price rise in 40 years, with inflation at 8.2% year on year. And the remedy to lower it does not bode well, since it requires slowing economic activity, which risks causing a recession.

With this sword of Damocles hanging over their heads, “consumers might not be spending so much”, anticipates Chris Butler.

Inflation will continue “to weigh heavily (…), which could lead to a difficult holiday season for retailers,” said Lynn Franco of the Conference Board, an economic research institute, on Tuesday. With such inventory, “insufficient demand can lead to steep discounts that would reduce their profit margins.”

Promotions

At this time of year , retailers and logistics providers should be gearing up to kick off the holiday season.

But due to “weaker consumer demand” and “overstocked” stores, “the volumes of goods transported have slowed and the price of transport has fallen”, notes Oren Klachkin, economist for Oxford Economics.

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With inflation, the prices of games and toys have, overall, increased “by about 15%” compared to Christmas 2021, according to James Zahn. “It will make a difference for families already constrained by rising food and fuel prices,” he said.

Toymakers like Hasbro, which distributes Monopoly, Nerf guns and Transformers action figures, thus have to adapt to the pared down purchasing power of parents.

“We have seen the average consumer become more and more price sensitive over the year “, recognized Tuesday its CEO, Chris Cocks, stressing that the operations of promotions had become “increasingly important”. 

Mattel, the seller of Barbie dolls and Fisher-Price toys, also warned on Tuesday that it would offer more discounts as the holidays approach.