Target is demanding that its suppliers bear more of the cost of marking down merchandise this summer, as it tries to move unsold inventory from the first part of the year, according to Reuters. While markdown allowances are a normal part of doing business with Target, the additional allowances the mass merchant is requiring are up to an additional 3-5% of the cost of the promotions.
The extra inventory comes from slower than expected sales in the Spring season (Target reported declining sales for the quarter ended April 30), as consumers migrate online or to off-price retailers for key department store categories. The negative trends for major retailers are not limited to Target, with many of its peers facing similar inventory build-up, according to MarketWatch.
Geek culture retailers are largely insulated from these trends, as their categories are not over-stored (yet), and comics and game companies support the independent brick-and-mortar stores where the communities that drive sales are nurtured. And even in the biggest retailers, geek categories are often seen as the solution, rather than part of the problem.
But the trends are worth watching, as it appears that some major shifts in American retail may be underway.