The Power of Retail

This holiday season, shoppers are heading to the numerous closeout sales and coming back piled high with purchases. These sales are mainly due to department stores and wholesalers unloading lots of fall and winter merchandise onto discounters, who are making the most of their windfall. For retailers, its the fastest way of moving slow or non-moving merchandise out of the stores before the holiday rush starts.

Discount retailers are only too happy to take in the overstock of clothing at prices much less than what retailers originally paid. While a part of this margin will be boosting their profits, most discounters are passing on some of their benefit to consumers and offering higher discounts this season as well as newer fashion.

Building 19 is one such discounter that has benefited from retailers unloading stock. According to analysts, off-price retailers are doing better than some department stores and apparel stores at the malls.

The combination of a warm fall along with high costs of energy and food, have led to a much slower than usual fall season while retailers are equipped with adjusting their merchandise requirements, this amount is likely to take some time.

According to Stephen Hoch, head of retail studies at the University of Pennsylvania’s Wharton School. “The whole supply-chain system is clogged up, and it could take four to six months for all this to clear up,” Hoch said. “It’s kind of like plumbing.” Off-price retailers, he said, “are seeing a big influx of better inventory than they might normally have.”