By Sarah Nassauer
And then, there weren't enough lights for the tree.
Holiday décor is selling out faster than usual in many stores
with two weeks left before Christmas, as Americans fill dark,
increasingly cold pandemic days by buying up more lights, trees and
ornaments at a rapid pace.
Walmart Inc., Costco Wholesale Corp., At Home Group Inc. and
other retailers known for selling holiday items didn't anticipate
the pandemic-fueled surge when buying most products for the season
nearly a year ago, say executives and people familiar with the
situation. In some cases, executives made purchase decisions just
as coronavirus-related restrictions took hold and trimmed
orders.
The imbalance, which has left some locations with bare shelves,
is a stark example of how the pandemic has disrupted retail
strategies and strained supply chains during the critical shopping
season.
Retailers generally can't augment supplies for holiday items at
the last minute. Artificial trees, string lights and other seasonal
products are often made nearly a year in advance in Chinese
factories that need to plan production schedules and allow time to
ship goods globally, retail executives say.
At Home Group in the spring cut its holiday-related orders by
about 15% compared with last year, said Lee Bird, chief executive
of the home-decor chain with more than 200 big-box stores. At the
time, all its stores were closed because of pandemic lockdowns. A
few weeks later, based on signs of a surge in home-goods sales, the
retailer upped its order by about 10%, which was still lower than
last year, he said. "It was such a dire outlook, we ended up
shrinking our buy for holiday," he said.
Overall that has helped profits at the chain, Mr. Bird said,
because it won't need to discount products as it did last year and
sales have skyrocketed since its stores reopened.
"If I could do life over again, I'd change some things, and one
would be buying more for this season," Mr. Bird said.
At Walmart, the country's largest retailer by revenue, merchants
almost a year ago bought slightly more holiday décor than they did
the previous year, based on economic forecasts and other indicators
at the time, said a spokeswoman.
But demand has surpassed those estimates and came earlier than
last year, said a person familiar with the situation. Walmart would
like to have more to sell, the person said, and is about a week
ahead of its typical holiday sales patterns.
Angie Rojas-Lindsey is decorating as much as possible this year
as she recovers from an early November Covid-19 diagnosis, she
said. "There is nothing to do so why not spend time making your
home beautiful," said the 44-year-old technology sales executive
who lives in Sioux City, Iowa.
She had to go to a half-dozen stores this week to find what she
wanted because shelves are unusually picked over, she said. To
secure a sold-out yard gnome from Target she signed up for online
alerts, she said, then convinced the store to sell her the floor
model. "The Target worker climbed up the display and cut it down
with a box cutter," she said.
Costco is already sold out of gift wrap and holiday décor in
many areas, finance chief Richard Galanti said on a call to discuss
earnings Thursday. The warehouse retailer decided to buy more
"basic needs for the house," such as barbecue grills and pressure
washers, he said, and less décor, in line with pandemic buying
trends earlier this year.
"We're running out of some of those decorative things a week or
two earlier than we would like to," though overall sales are very
strong, he said.
In recent weeks, several large retailers have reached out to
Christmas Central, a mainly online seller of lights, artificial
trees and décor, looking for more inventory for stores, said Nathan
Gordon, Christmas Central's president. The firm, which sells
holiday goods on other retailers' websites as well as on its own
site and in four bricks-and-mortar stores in Buffalo, N.Y., had to
decline the requests, Mr. Gordon said. The company's November sales
were nearly double those of last year, he said, and it has had to
restrict sales through its retail partner websites to keep up with
demand.
Christmas Central anticipated robust demand this year as the
pandemic forced more sales online, Mr. Gordon said. "Our biggest
challenge is really trying to keep up with the orders" inside
warehouses and with delivery firms, Mr. Gordon said. "We want
everything to arrive on time."
In recent weeks, traffic to stores has been lower than last
year, while online sales surge, according to firms that track
traffic and sales. That shift is straining delivery networks.
Shippers are limiting capacity to some retailers, and deliveries
are being delayed in some cases.
Shoppers aren't just buying more, but more products in line with
pandemic lifestyle changes, said some retail executives. At Dollar
General Corp., the dollar-store chain with more than 17,000 U.S.
stores, sales of wrapping paper are higher and gift bags lower than
last year, said a spokeswoman. The company believes more customers
are wrapping gifts to ship, instead of exchanging gifts in person,
she said.
Demand for do-it-yourself holiday items has been strong this
year because shoppers are looking for something to do, said Laura
Denk, chief merchandising officer for Michaels Cos., a crafts
retailer with more than 1,200 stores. Comparable sales, those from
stores or digital channels operating for at least 12 months, rose
16.3% during the quarter ended Oct. 31.
Earlier in the year, the company bought more do-it-yourself
wreath, ornament and other crafting supplies than last year to
stock stores this holiday. "We did not pull back," Ms. Denk
said.
Demand is still so high, there are "a few things I wish I had a
little bit more of," she said.
Write to Sarah Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
December 11, 2020 10:06 ET (15:06 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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