"It's a retail armageddon": Overstocked stores give big discounts as supply chain backlog eases
In a big surprise for shoppers who have been burdened by rising prices, there are deep discounts in stores across the U.S. The merchandise on cargo ships stuck at sea during the supply chain crisis is now crowding store shelves, prompting big sales.
"It's a retail armageddon," Burt Flickinger, managing director for Strategic Resource Group, told CBS News.
That's good news for shoppers, he said.
"Biggest discounts — consumer electronics, sporting goods, on apparel, clothes, accessories," he said.
The merchandise surplus comes at a time when inflation is forcing consumers to cut back. Flickinger says some stores are overstocked by more than 30% and there's no place to put everything. Target recently admitted it needs to "right-size its inventory" and the retailer's plans include "additional markdowns."
"You have too many goods and too many stores chasing too few shoppers with too few dollars," Flickinger said.
The extra goods often get sold to liquidators like Bargain Hunt, which sells items at up to 70% off retail. But this time, Bargain Hunt executive Norm Rankin is seeing something different.
"The condition of the product — it's never left the case, it didn't make it to the stores, it's not dog-eared or wrinkled or ruffled having been on a shelf," Rankin told CBS News.
The inventory overload is even hitting small business owners like toy seller Maryam Al-Hammami.
"My first thought was, I'm glad I'm not them," she said of big box stores. "But then all of a sudden I realized I am them!"
But she's not having a fire sale just yet. Her suppliers keep raising prices, so she's trying to store extra toys until demand comes back.
"Sitting on product that I purchased for 20% less when I ordered it last September is a better option than purchasing it for 20% more next month," Al-Hammami said.
Even bigger sales could be on the way after Labor Day.
But what about returns? Retailers don't want to advertise this, but with warehouses full, some are now refunding money to customers and telling them to keep the item instead of bringing it back.