Black Friday deals not cutting it?

To snag some of this year’s Black Friday deals, a car won’t do you much good — try an ocean liner. Plenty of would-be holiday gifts are still at sea, caught up in a mess of global shipping delays. But shoppers who can’t find what they’re looking for this week may have another savings event to look forward to. Call it Black January.
Retailers including Nike Inc and Victoria’s Secret & Co have struggled to get products from factories across the world in time for the most crowded shopping day of the year. Nike said in September that a typical 40-day journey for sneakers had stretched to 80 days, while 45% of Victoria’s Secret’s inventory is still delayed, including a quarter of its pajamas.
Not only that, but wage gains and an almost inexplicable level of consumer demand in the US suggest that this year some companies can get away without heavy discounting. Others began their doorbusters weeks ago, so any 50%-off and buy-one-get-one signs on Thanksgiving weekend will land with less effect.
It’s possible that the combination of later inventory arrivals and restrained promotional activity will leave stores better stocked towards the end of the shopping season. If so, the weeks following Christmas may bring discounts on winter items that retailers still need to move off their shelves. Red-and-green-plaid pajamas, furry boots and puffy coats start to lose their appeal come January 1.
“Anything that is really seasonal that needs to sell before December 25, we’re confident that it will come in time,” Martin Waters, chief executive of Victoria’s Secret, said.
However, he added, “I do think stores will be more full of inventory in December — mid-December and late December — than the customer is used to seeing.” Depending on when the company receives its orders, “we will need to be flexible with our pricing,” said Tim Johnson, its chief financial officer.
Indeed, it may not be long before anything left over from the holidays winds up in the bargain bin. That means the financial impact of delayed goods may itself be delayed. Investors were nervous heading into third-quarter results that retailers and consumer brands would see profit margins squeezed by the combination of higher freight, labour and raw-materials costs. But companies were able to raise prices enough to cover the impact. The pinch may instead come in the new year, as supply-chain pressures continue while an inventory backlog erodes retailers’ pricing power.

—Bloomberg