As consumers are spending less on items like clothing and electronics, retailers are selling their inventory to liquidators at steep discounts.
In Pittston, PA, a warehouse owned by Liquidity Services, which collects surplus and returned items from large retail companies, is dealing with an onslaught of inventory due to consumers spending less because of inflation.. Additionally, people are returning more items that were bought online.
In 2021, people returned an average of 16.6% of their purchases as opposed to 10.6% in 2020. The returns have also cost retailers an estimated $761 billion in lost sales; often, they cannot resell the returned items themselves. Retailers miscalculate the supply and demand due to supply chain issues, which cause companies to secure products in advance. Recently, Walmart warned that its operating profits would drop as a result of price cuts on oversupply of inventory.
Many companies cannot afford to keep discounted items on shelves as they make room for seasonal items. Most of the surplus items are ending up in warehouses like the one in Pennsylvania. Other times, the excess items are donated to charity, shipped to landfills, or burned in incinerators.
Overall, the warehouses offer insight to a worsening situation regarding excess goods. Chuck Johnston, a former Walmart executive, now a chief strategy officer at goTRG, commented that, “I have never seen the pressure in terms of excess inventory as I am seeing right now.”
In Pittston, PA, a warehouse owned by Liquidity Services, which collects surplus and returned items from large retail companies, is dealing with an onslaught of inventory due to consumers spending less because of inflation.. Additionally, people are returning more items that were bought online.
In 2021, people returned an average of 16.6% of their purchases as opposed to 10.6% in 2020. The returns have also cost retailers an estimated $761 billion in lost sales; often, they cannot resell the returned items themselves. Retailers miscalculate the supply and demand due to supply chain issues, which cause companies to secure products in advance. Recently, Walmart warned that its operating profits would drop as a result of price cuts on oversupply of inventory.
Many companies cannot afford to keep discounted items on shelves as they make room for seasonal items. Most of the surplus items are ending up in warehouses like the one in Pennsylvania. Other times, the excess items are donated to charity, shipped to landfills, or burned in incinerators.
Overall, the warehouses offer insight to a worsening situation regarding excess goods. Chuck Johnston, a former Walmart executive, now a chief strategy officer at goTRG, commented that, “I have never seen the pressure in terms of excess inventory as I am seeing right now.”
