Walmart, Target and dozens of other major U.S. retailers are canceling billions of dollars in orders ahead of the coming holiday season, according to reports.
The holiday season is usually the busiest time of year, and at this time in 2021 there were concerns the global supply chain couldn’t handle the demand.
But it’s the opposite in 2022.
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“All of a sudden major retailers are feverishly canceling orders, and this would only make sense if a severe economic downturn was imminent,” journalist Micheal Snyder writes.
Walmart admitted that it has canceled “billions of dollars in orders” as the upcoming holiday season approaches.
Per Retail Wire:
John David Rainey, Walmart’s EVP and CFO, said it had cleared most summer inventory, was reducing exposure in electronics, home and sporting goods, and canceled “billions of dollars in orders” to realign inventories. He said, “Our actions in Q3 will allow us to make significant progress toward rationalizing absolute levels and mix, which will enable our stores to be well positioned ahead of the holiday season.”
Meanwhile, Target canceled “more than $1.5 billion” in orders.
Per End Time Headlines:
Christina Hennington, Target’s EVP and chief growth officer, said steps being taken by the discounter’s buying team include “rigorously reforecasting expectations for the balance of the year and beyond and determining where to reduce future receipts and orders.
Kohl’s and Under Armour have also canceled huge numbers of orders.
Footwear News reports:
Kohl’s has also pulled back on order receipts and increased promotions to get through an inventory glut.
“We have taken action to address inventory, including increasing promotions, being aggressive on clearing excess inventory and pulling back on receipts,” said Kohl’s CFO Jill Timm in a call with investors.
Under Armour also said it made some proactive cancellations due to supply chain constraints to ensure that “the right inventory was coming in at the right time,” said interim president and CEO Colin Browne in a call with investors.
FedEx CEO Raj Subramaniam publicly warned that a massive recession is coming.
Snyder writes:
Sadly, he is right on target.
For months, I have been warning that the economic numbers were telling us that big trouble was on the way, and now everyone can see it.
But unlike the “Great Recession” of 2008 and 2009, this time we are also going to have to deal with raging inflation even as economic activity slows down all around us.
In fact, the Wall Street Journal is ominously warning that U.S. consumers “are set to pay even more this winter” as heating costs continue to soar to absolutely ridiculous levels…
U.S. utility customers, faced with some of their largest bills in years, are set to pay even more this winter as natural-gas prices continue to climb.
Natural-gas prices have more than doubled this year because of a global supply shortage made worse by the war in Ukraine, and they are expected to remain elevated for months as fuel is needed to light and heat homes during the winter. The supply crunch has made it substantially more expensive for utilities to purchase or produce power, and those costs are being passed on to customers.
The cost of living has been rising much faster than our paychecks have for quite some time now, and a lot more pain is on the horizon.
I really like how Brandon Smith recently summarized the current state of the U.S. economy…
A common refrain from people who are critical of alternative economists is that we have been predicting crisis for so long that “eventually we will be right.” These are generally people who don’t understand the nature of economic decline – It’s like an avalanche that builds over time, then breaks and quickly escalates as it flows down the mountain. What they don’t grasp is that they are in the middle of an economic collapse RIGHT NOW, and they just can’t see it because they have been acclimated to the presence of the snow and cold.
Economic decline is a process that takes many years, and while you might get an event like the market crash of 1929 or the crash of 2008, these moments of panic are nothing more than the wreckage left behind by the great wave of tumbling ice that everyone should have seen coming far in advance, but they refused.
That is so true.
We are already in the midst of a raging economic crisis, but things will get so much worse during the months and years to come.
