Low Holiday Inventory Means IOUs Under the Tree

Shoppers looking to buy popular toys, clothes and electronics as gifts this holiday season may end up leaving stores with rain checks instead. It looks like retailers weren't kidding when they warned earlier this year that they were cutting back on inventory to avoid markdowns. Those sale laptops and cashmere sweaters will run out quickly this year and likely won't be restocked.
%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%%Some households may even have to put IOUs under the tree, reports The Dallas Morning News. The newspaper spot-checked stores and websites, and found several out of stock on popular gift items. Indeed, a survey by Consumer Reports found 34% of consumers who had started holiday shopping last weekend said that at least one item they wanted was out of stock. And the missing items were in the popular gift categories such as toys, electronics and apparel.

Holiday shoppers' growing procrastination may be paying off with more sales, but it's also running up against merchants' recessionary stock plans. One retailer after another has warned this season that they had cut back inventory, some by double-digit percentages. A survey of U.S. ports from the National Retail Federation, the industry's trade group, estimated imports arriving in the U.S. will be down nearly 17% this year below 2008.

Cherry-Picking for Bargains

So the tug of war continues between retailers, which have managed to stay afloat this year by cutting costs and markdowns, and what one analyst quoted by the Morning News described as "surgical shoppers" cherry-picking bargains.

But things may pick up after the holidays, now that economic indicators have begun pointing up and retailers have cut as much as they can. The NRF's PortTracker survey is forecasting that cargo arrivals will pick up 16% in February 2010 above the year before, the first monthly increase in over two years. The NRF survey says year-over-year drops in cargo volume have tapered off in recent months, so inventories appear to be building up again.

So hang on to that gift card, and check the return policy on that gift receipt. If you can wait, you may have more to choose from once the stores restock after the holidays. Valentine's Day is looking good.
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