Big-Box Stores Better Equipped to Handle Supply Chain Bottleneck

Small retailers across the U.S. are having trouble overcoming the supply chain snafus of the past several months, while the nation’s biggest companies — including Walmart, Home Depot, Lowe’s and Target — are finding solutions to work around them, according to a Financial Times report on Friday (Nov. 19).

Kohl’s, meanwhile, pointed to “extended transit times” that left its inventory levels 25% lower than in 2019 at the end of the third quarter, with shortages especially low in women’s clothing. Macy’s inventory was more than 15% lower than two years ago.

“It’s kind of the haves and the have-nots,” said Jennifer Bisceglie, CEO of Interos, a supply chain consultancy, in the FT report. “The bigger retailers are the ones who have. They had the ability to reach deep into their coffers and start airfreighting produce forward. The have-nots are the small shops, the SMEs that are beholden to their local markets.”

Brands including Steve Madden, Carter’s and Deckers had all reported steep increases in “inventory in transit” in their latest earnings statements, said Nick Mazing, director of research for financial data group Sentieo.

The latest survey from Alignable, a network for small business owners whose polling shows small stores struggling with surging inflation and a shortage of supplies, showed that 40% of small U.S. retailers expected to be unable to pay their rents for November, up seven percentage points from October, and more than one-quarter said they were in danger of closing for good in the fourth quarter.

Related news: Inventory Shortages Could Make Holiday 2021 the Year of the Gift Card

The continuing supply chain snags and looming inflation are turning 2021 into the year of the gift card for holiday shoppers.

Brett Narlinger, VP of global commerce at Blackhawk Network, told PYMNTS that the company has started to see a dramatic increase in gift card purchases for the holidays this year, in large part because of supply bottlenecks that have consumers worried about getting items in time — and partly because consumers’ digital shopping patterns have stuck around even as the COVID-19 pandemic has slowed down.

A Blackhawk survey shows that consumers will be doing as much as 41% of their holiday shopping using gift cards, and the average consumer will purchase 15 prepaid cards this year — a 50% increase over last year and a 200% increase over 2019.