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Inventory Stabilizes for the First Time Since Pandemic

Q3 2023 saw inventories shrink while sales grew.





The third quarter of 2023 marked the first time since 2020 that retail sales outpaced inventory, according to analysts at the Telsey Advisory Group.

Retail Dive noted that consumer demand tanked in spring 2022 as a result of inflation and other factors, leaving retailers with excessive inventory positions. It took about 18 months for retailers to resolve the inventory problem.

“Improving supply chain trends and leaner positions have helped facilitate a return to a more normalized planning/ordering/buying timeline with greater predictability and the ability to once again read, react, and chase trends,” the analysts said, according to Retail Dive.

In 2024, retailers are anticipated to “continue to control inventory,” according to the analysts.

In Q3 2022, the spread between inventory and sales growth was positive 3,320 basis points, according to the analysts.

In Q3 2023, the spread hit negative 730 points. In addition, inventories in the retail sector were down 7.8 percent in Q3 2023, compared to 38 percent growth in Q3 2022.




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