Christmas will be ‘most under stocked in recent years’

Will Green is news editor of Supply Management
3 December 2013

This Christmas will be the “most under-stocked in recent years” as retailers slash inventories to avoid the deep discounting of the past, according to KPMG.

KPMG says merchandising departments have been given greater influence over buyers to manage stock levels so retailers are not left “holding the baby”.

David McCorquodale, head of retail at KPMG, said fashion retailers would be holding 3 per cent to 4 per cent less stock compared to last year, which will “save these retailers millions in wasted margin”.

“Retailers don’t want to be left holding the baby this Christmas and so most have kept stock holdings down to a real minimum,” he said. “They are desperate to avoid the deep discounting of previous years when a combination of over ordering and depressed consumer spending left too much surplus stock on the shelves and they had to slash prices to shift it.”

McCorquodale said the traditional role of merchandising departments was to gather retail sales data, which was then fed back to buyers, but now they had greater influence over purchasing decisions.

He added “dwindling availability of credit insurance” meant retailers were financing stock purchasing themselves, which increased the pressure to hold as little as possible.

“Merchandising departments, working closely in association with those responsible for targeted promotions, have been given a greater influence than buying departments to manage stock levels and margins,” he said. “This improved management of stock means the most successful retailers on the high street won’t need to discount as extensively or as deeply this year, so it’s likely shoppers will only find real bargains at the less successful players, whose ranges aren’t as good or who have over ordered.”

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