Retailers Cut Christmas-Themed Item Orders Ahead of Lukewarm Holiday

As the holiday shopping season begins, expect to see fewer Christmas-themed items in stores.

Retailers such as Walmart are ordering fewer Christmas trees, toys and decorations this year, in anticipation of a lukewarm shopping season, Reuters reported Tuesday (Nov. 5).

According to the report, Walmart — the largest retailer in the world — shipped 340,000 kilos of products labeled “Christmas” goods into the U.S. in the 12 months ending Sept. 30.

That’s down from at least 980,000 kilos in the prior 12-month period and 1.9 million kilos the year before that the report said, citing data from ImportYeti.

A spokesperson for Walmart told Reuters this “only paints a partial picture of what we source due to the exclusion of data from marketplace, national brands, and domestic importer data for private brands, among other things.”

Reuters also spoke to said Charles Sizemore, chief investment officer with Walmart investor Sizemore Capital Management, who said the retailer regularly scrutinizes information on consumer spending patterns, including credit card data.

“They have done the research on their consumer. And what they have concluded is that the holiday season is not going to be as strong,” he said.

While the holiday product import data does not include things like electronics, clothing or other general merchandise, what it demonstrates “is pretty obvious,” he added. “If Walmart is ordering less, they are expecting sales to be tepid.”

Retailers are “predicting a smaller sales increase this holiday than we saw last year,” added Gerald Storch, retail consultant and former CEO of Hudson’s Bay.

“Consumers are stretched with less money left for discretionary purchases,” he said. Though U.S. consumer spending is up overall, “some commentators keep confusing total consumer spending (including necessities like housing or healthcare) with discretionary spending.”

In fact, the government’s latest consumer spending data shows people spending more on things like healthcare, housing and nondurable goods.

“The expenses showed that key everyday essentials are still the bulk of what consumers are using their paychecks for,” PYMNTS wrote last week. “Larger-ticket items, such as vehicles and furnishings, are seeing combatively muted outlays, and even some declines.”

And as noted here last month, mass market retailers such as Kohl’s, Target and Dollar Tree are unveiling a slew of holiday deals to attract budget-conscious shoppers.

“The current economy presents challenges for millions of Americans, with many living paycheck to paycheck,” that report said.

“Inflation is palpable, leading consumers to trade down in their purchasing decisions and seek out retailers that offer the best deals. As mass merchants ramp up their holiday promotions, understanding the financial context in which they operate is crucial.”