Massive retailer Target Corp recently raised its holiday sales forecast, even amid the consistent global supply chain problems that many analysts are worried will hinder the holiday shopping season this year. Because of these global supply chain problems, the cost to ship products and grow one’s inventory has become a pricey mission — and this high cost to ship goods will likely result in consumers having to pay more money when buying these goods.
Already, American consumers are shopping for Christmas and the holiday season because of the expected supply chain problems. Because consumers have already begun their big shopping, Target has already seen a rise in sales — and has raised its sales forecast for the end of the year as a result. Sales also rose at the end of the third quarter for the retailer by about 12.7%. Most of this sales growth occurred in stores, rather than online (which was huge when the pandemic first started in 2020).
Target has already revealed its inventory levels are high, helping to calm both consumers and investors. According to the large retailer, its inventory levels are up by more than $2 billion, when compared to its inventory from the same time last year in 2020. To increase its inventory, Target has spent quite a lot of money to ensure that consumers won’t be dealing with empty shelves in its stores this year. Other large corporations, such as Walmart, have also made these moves and leased container ships and cargo jets.
Even though Target has spent more money in this regard, the company hasn’t yet told consumers or investors that it will raise prices of its goods in stores. Other companies and brands have already admitted as much, and many electronic goods are expected to be higher this holiday shopping season than normal. However, Target revealed it has kept its goods at lower prices, even though vendors have raised prices because of the high cost of raw materials and more. These lower prices of goods, if they stand, may help Target do very well with consumers once the holiday shopping season gets in full swing.
Since the pandemic began, Target has been pivoting and adding features to their shopping experience to help sway consumers. Just as with other major businesses, the retailer did pivot to online shopping when the pandemic first began. However, other features, such as same-day delivery services, have also helped increase the retailer’s sales. Now that more consumers are more comfortable going out and shopping, store traffic has greatly increased — by almost 13%, according to the retailer.
If Target truly already has a massive inventory and is ready to go for the holiday season, then the retailer may not have the issues that other businesses may have. Larger corporations are thought to do well this holiday shopping season, as they can buy their way out of the global supply chain issues, whereas smaller companies don’t have this capability. Labor shortages may continue to hurt Target and other businesses in the holiday season, though this could still change in the next month.