Holiday Merchandise and Retailers: Will Retailers Hurt Themselves With Conservative Predictions?

Many retailers are reportedly ordering less holiday merchandise in the hopes of keeping profits up and excess inventory down, but there are already reports that many shoppers are unable to find certain merchandise, most of which is toys, and stores are finding it difficult to replenish their shelves in time for the holidays.

Obviously, retailers want holiday merchandise to sell and in a perfect world they would make a major profit on those sales without having anything left over which is unlikely to sell after the holidays. Predictions have been negative for the retailer’s holiday season but it is these predictions that may be causing the trouble for consumers wanting more merchandise.

There are those who believe that last year’s low holiday numbers for retailers is more reason for people to buy big this year. Yes, many have lost jobs, had income cut in half or worse, and are struggling financially but with all these woes that many have experienced over the last year this holiday season seems like the right time to simply forget about all those things and splurge.

When people seek to buy a home or invest hundreds-of-thousands of dollars they don’t have, problems arise as we all have seen over the past year. However, spending a little extra for Christmas isn’t going to put anyone on the streets. Hopefully, many Americans who have been hit by the recession are learning to better manage their money and learn the difference between items that are necessity and those that are merely wants. However, Christmas is a time when people go the extra mile and treat family and friends to gifts and with this past year being a lean one for so many it stands to reason that customers are going to be looking for holiday merchandise that will allow them to forget the sacrifices and loss that has been experienced.

So, could it be that retailers are going to bring low numbers on themselves by ordering less holiday merchandise or are they right in playing it safe? By ordering less merchandise they can raise their profits but they are lowering their sales as well. Should stores seek the highest profit possible at the expense of less merchandise or should they seek to put more holiday merchandise on the shelves in the hopes of higher sales?

We are getting close to Memorial Day 2012 which means that many retailers will think about marking down merchandise.  As we continue to get closer to this summer holiday event look for most shoppers to wait until the last minute to make a purchase decision.  Luckily, this does not hurt most people as retailers recognize that shoppers will wait to make a major purchase.