US retailers, led by Walmart, are cutting back on Christmas-related imports, indicating a cautious approach to holiday sales.
Import data reveals a significant drop in holiday-specific items brought into the country. It suggests retailers are preparing for slower consumer spending amid economic pressures.
Reduced Imports Reflect Anticipated Soft Holiday Demand
Walmart is the world’s largest retailer. It has dramatically decreased its holiday merchandise imports.
The company has shipped in just 340,000 kilos of Christmas-related goods in the past year, a sharp drop from nearly 1 million kilos in 2022.
This shift reflects Walmart’s careful analysis of consumer spending trends.
Charles Sizemore, Chief Investment Officer of Sizemore Capital Management, said:
“They have done the research on their consumer.
“If Walmart is ordering less, they are expecting sales to be tepid.”
Walmart’s decision aligns with other retailers, who have collectively reduced Christmas imports by over 20 percent compared to two years ago.
Retail analysts say US consumer spending has been stretched, leaving less for discretionary purchases like holiday decor and gifts.
Tight Inventory to Avoid Excess Stock
This year’s cautious inventory strategy follows excess stock issues in previous holiday seasons, where unplanned discounts cut into profits.
Dana Telsey of Telsey Advisory Group, said:
“Retailers want to avoid being stuck with excess merchandise.”
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Major retailers have also adjusted seasonal hiring plans. Fewer workers are expected to support this year’s slower holiday shopping period.
Holiday Sales Expected to Slow
The National Retail Federation (NRF) has forecasted a modest holiday spending growth of 2.5-3.5 percent, the lowest since 2018.
Retail consultant Gerald Storch emphasized that while total consumer spending is up, much of it is directed toward essentials like housing and healthcare, leaving less for holiday splurges.
Craig Johnson, president of Customer Growth Partners, anticipates only a 4 percent rise in holiday sales, down from last year’s 4.1 percent.
