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Retailers offer more pre-Labor Day sales due to excess inventory
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Retailers will typically offer sales around Labor Day to get stores ready for the pivotal holiday season. This year, however, there are more pre-Labor Day sales than in years past due to a problem hitting retailers across the industry: excess inventory.
"We're seeing a lot of promotion activity going into this Labor Day probably more than we have seen in years," Mark Mathews, vice president of research development and industry analysis for the National Retail Federation (NRF), told FOX Business. "It's across a full spectrum of retailers."
In 2021, retailers saw tremendous demand. Retail sales surged 14% year-over-year which is "absolutely unheard of" especially compared to pre-pandemic times when average retail sales growth was about 3.7%, according to Mathews.
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Retailers were ordering a lot of goods to meet demand, however, supply chain disruptions caused significant delays for a range of products. By the time they finally hit shelves, consumer habits shifted as people traded workout attire for work attire once again, and demand waned due to a surge in inflation.
Even during pre-pandemic times it was hard to predict what consumers want, but in "post-pandemic times there is no template right now," Mathews said.