Business Insider: Products delayed by the supply chain crisis will end up heavily discounted at stores, analysts say
- Shoppers can expect more discounts in stores in the coming months because of the supply chain crisis.
- BMO analysts said delays mean items could arrive too late for the holidays and then be marked down.
- Retailers are also over-ordering items to avoid shortages, which could lead to leftover stock.
The supply chain crisis might stop you from getting your holiday gifts on time but it could also lead to big discounts over the next few months, analysts say.
In a note to clients reported by Marketwatch, a group of BMO analysts said delays across global transportation networks mean many products will miss their intended season — and therefore end up being discounted.
While supply chain delays had initially come from manufacturing issues such as factory shutdowns, the problems are now mostly down to a breakdown in the freight, rail, and trucking industries, they said.
“The issue is actually less one of lack of supply and more one of an inability to get the supply to stores,” BMO analysts wrote, adding, “It is simply a matter of time before late product hits the floors and begins to drive up promotions.”
Retailers and manufacturers across the world are scrambling to shift items from factories or from containers on ships and ports to the right place in time for the holiday season. The global supply chain has been in crisis for several months. After a fall in demand during the early days of the pandemic in 2020, a surge at the end of that year led to delays and blockages across the world.
To make matters worse, experts say some retailers are over-ordering and panic-buying products to give themselves a better chance of having fully stocked stores.
“There’s no reason to panic buy, it just leads to a worse effect,” Jonathan Savoir, CEO of supply chain technology company Quincus, previously told Insider. It puts extra strain on the supply chain and adds to the risk of retailers ending up with leftover stock after the holidays, potentially leading to more promotions.