Are Retailers Shooting Themselves in Foot with Low Inventory Strategies?
The recession has caused almost everyone to cut back on inventories, due to both a concern about customer demand and also because right now “cash is king,” and inventory uses up cash. Nevertheless, I think many retailers may be taking it much too far, and costing themselves sales and profit as a result. Three recent personal anecdotes I hope make the point: • Two weeks ago I went in a large mass merchant to purchase some mini-DVD tapes for our video work. Virtually every peg was empty. The only ones with product available were terrible deals. An associate there said they hadn’t received inventory in that area “for several weeks.” I walked out without a purchase – as I assume many others have as well. • At a different mass merchant just this weekend, I needed to buy a gallon of anti-freeze for one of our cars. The shelves were simply decimated. In fact, I assume intentionally, they had taken some of the product that was still available (higher priced “extended life” anti-freeze) and mov
