The nation’s top retailers have watched their inventories significantly expand due to shipping delays caused by the COVID-19 pandemic.
According to a Bloomberg report, a 26% increase in inventories since last year has added up to $44.8 billion between S&P consumer indexes with a market value of at least $1 billion and reported earnings in the previous two weeks.
Target reported a 43% increase in inventory, Walmart reported a 32% increase, Macy’s reported a 17% increase, and Costco reported a 26% increase.
These large retailers now face rising costs in storage fees or having to issue significant discounts to make room for more inventory. Discounts could be especially difficult for businesses, given the steep rise in inflation. This means a rising cost of goods for consumers to account for the increased cost of managing and storing inventories for the companies.
This will most likely impact the American consumer directly, staying in line with the 40-year record inflationary rates in consumer pricing and wholesale goods.
It is worth noting that excess inventories typically signal a recession or overall economic downturn. Goldman Sachs has predicted a 35% chance of a recession in the next two years, while a Wells Fargo model projects a 30% chance of a recession occurring in the next six months. The prolonged impact of the pandemic on the financial markets has yet to be realized.
Dear Reader - The enemies of freedom are choking off the Gateway Pundit from the resources we need to bring you the truth. Since many asked for it, we now have a way for you to support The Gateway Pundit directly - and get ad-reduced access. Plus, there are goodies like a special Gateway Pundit coffee mug for supporters at a higher level. You can see all the options by clicking here - thank you for your support!
