Target To Slash Prices For TVs, Furniture Because Of Inventory Glut

Hank BerrienJune 8, 2022

Target has revealed it will slash prices in order to reduce its inventory.

The plethora of TVs, furniture and kitchen appliances stacked up at Target stores are taking up room that the franchise would prefer to stock with items such as food, household essentials and beauty products.

“We thought it was prudent for us to be decisive, act quickly, get out in front of this, address and optimize our inventory in the second quarter — take those actions necessary to remove the excess inventory and set ourselves up to continue to be guest relevant with our assortment,” Target CEO Brian Cornell told CNBC.

“We want to make sure that we continue to lean into those categories that are relevant today,” he added.

Other franchises are also plagued by inventory surpluses; Walmart stated that their customers are eschewing discretionary purchases because of the price of gas and groceries.

“Over the past several weeks, we’ve continued to assess the broader retail environment and I think it’s no secret right now based on what’s been reported, the level of inventory across all retail is pretty high,” Target CFO Michael Fiddelke stated.

“Some of the blockbuster deals seen on the store’s site include a four-piece outdoor furniture set, usually priced at $409.99, for $267.99 — markdown of nearly 35 percent, and a 40 inch HD television for $200, marked down from $250,” The Daily Mail reported. “Last month, Richfield-based tech retailer Best Buy announced it would prepare for a ‘slowdown’ in sales as it reported higher operating costs than predicted for the first quarter of 2022.”

Kyle Goldschmidt, an assistant professor at the University of St. Thomas’ Department of Operations and Supply Chain Management, explained that the glut of inventory resulted from shipping delays as companies ordered products in advance.

“This has resulted in historically high logistics costs throughout the supply chain, from ocean, rail and trucking carriers, to warehousing, and now fuel costs,” he said. “Concurrently, consumer spending is gradually shifting from goods back towards services … which could leave retailers with too much inventory, and more importantly, the wrong type of inventory.”