Target warned Tuesday that it had far too much inventory and would have to drop prices, cancel orders and cut its profit outlook to clear out the excess.
https://www.washingtonpost.com/business/2022/06/07/target-pr…
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A quick Zillow search in the Panama City area of Florida shows about 20 percent of the agent listing have price reductions on them. These are averaging less than 5 percent declines per price decrease. In other words the discounts may be higher as they may have multiple discounts as they age on the market.
I did notice that new homes by at lease one builder had be marked down by about 3 percent. However, this may mean nothing as the builder may have cut standard features and the price for the house may have actually increased.
Cheers
Qazulight
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Target warned Tuesday that it had far too much inventory and would have to drop prices, cancel orders and cut its profit outlook to clear out the excess.
What about this statement doesn’t make sense?
If you buy the argument that inflation is high, then having inventory at last month’s prices is better than cash in the bank, in the coming months.
Of course, if the inventory is no good, because management bought the wrong things, then it would make sense.
If management made a mistake and bought too much seasonal stuff, it would make sense, unless you buy the inflation argument. If you buy the inflation argument, that it would be profitable to sit on the stuff and sell it at 2023 retail prices, with a 2022 cost basis.
RS used to blow out the leftover Christmas toys at deep discount after New Year. Around 91, top management decreed they weren’t going to take that hit to margins anymore. The Christmas stuff went back to full price around March 1, and stores were told to sit on the stuff until the next Christmas.
…of course, I have questioned RS management decisions in several areas…
Steve
Target and GM Chevy Bolt. Two cases of mismanagement or leading indicators?
Excess inventory is often a sign of poor management but getting rid of it is a sign of good (remedial) management.
The Captain
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You made me look. In my rural Indiana county Zillow has 67 homes for sale. 30 of them have reduced prices.
A quick Zillow search in the Panama City area of Florida shows about 20 percent of the agent listing have price reductions on them.
We have a vacation home on 30A. I get weekly emails from a local realtor on homes for sale. About 1 month ago started seeing homes with price reductions, some now as much as $150k on a $3M home. Not much percentage wise but a new trend. However, haven’t seen a home for sale for less than $1M in over a year, even 1500 sq/ft condos are around $2M.
As far as Target having high inventory, we shop there and think some of it is mismanagement. Seeing a lot of products that are “weird” like vegan dish soap (totally making that up). Stuff that middle class America is probably not interested in. Then add inflation, people might not be shopping as much as before is getting necessities only and then going for the store label instead of brand name.
JLC
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… Seeing a lot of products that are “weird” like vegan dish soap (totally making that up). Stuff that middle class America is probably not interested in.
Even TJX buyers? (at the right price?)
'38Packard
I was at Target today and could not see any difference. Not much merchandise in the sale category. No special sale tables. No mad dash of customers to grab sale stuff.
Jaak