Nordstrom Inc recently revealed that its stores may experience product shortages, though mainly at its off-price stores such as Nordstrom Rack, during the holiday shopping season. Nordstrom’s off-price stores have struggled in the past few weeks and months as a result of low stock in women’s clothing and shoes. Now, it appears that these stores will still suffer during the holiday season because the company did not get the chance to build up its inventory, as was expected.
As Nordstrom produces many of its products in factories in Asia, the company as a whole has struggled to build up its stock for the last few months because of closed down factories (as a result of a surge in COVID-19 infections). Global supply chain problems and bottlenecks have also kept the company from building up its stock, as well as labor shortages.
According to the company, Nordstrom Rack’s third-quarter sales fell by about 8%, when compared to sales from 2019 before the pandemic began. Meanwhile, Nordstrom Rack’s rivals — notably Macy’s and Kohl’s — have managed to return its sales to what they were making before the pandemic ever started.
For the most part, it appears that this low stock at Nordstrom Rack has to do with the supply chain issues the company has faced. Because the company did not respond to these issues as quickly as they hoped they would, Nordstrom Rack now has to face low stock at its stores, according to the company.
Nordstrom Inc. also couldn’t spend as much money as they may have wanted to ship their goods to their stores before the holiday season started, as they spent a lot of money on ensuring its stores were staffed before the holiday shopping season officially began. Labor shortages have gripped the United States for months now, forcing many retailers and clothing outlets like Nordstrom to raise their hourly wage, as well as offer bonuses to get new employees. Just in October alone, Nordstrom had plans to hire more than 28,000 employees before the holiday shopping season began. The company also had plans to offer new workers up to $650 as a bonus once they’re hired.
As a result of this low stock and other issues, Nordstrom has kept its annual revenue growth forecast the same, at about 35%. The company did not change or raise its sales expectations, something that Macy’s already did after seeing beneficial early holiday shopping at its stores around the nation.
The global supply chain issues that have affected so many businesses for the past few months will surely be a problem for some companies once the holiday shopping season officially begins. Already, analysts are signaling that consumers may spend more money this year during the holidays in a while. While many companies, such as Walmart and Target, have already revealed that they have a full stock ready for the holidays, other companies (such as Nordstrom) may face a difficult holiday season with low stock. However, these companies will likely still do well, even with a lower than average stock.