Supply Chain Crisis For Retailers, Pk Of Giants And Small Companies
Since the lifting of the New Crown epidemic restrictions, the U.S. economy has recovered, as well as a surge in consumer demand. At the same time there have been soaring shipping prices, supply shortages, port congestion, and truck driver shortages, while the supply chain has seen great challenges. As we approach the year-end shopping season, retail giants such as Wal-Mart and Lloyd’s have stable inventories. In contrast, small retailers in the supply chain crisis will face the risk of permanent closure.
Supply Chain Crisis For Retailers, The Recovery Of Giants
Retail giants such as Walmart and Costco have enough money to be able to charter their own ships to transport goods around the world, airlifting much-needed merchandise to ensure on-time delivery.
Meanwhile, large retail companies are seeing large increases in inventories stabilize ahead of the busy year-end shopping season. Walmart’s inventory in the U.S. has increased by 11.5%, in contrast to some smaller stores with empty shelves. In addition, the retail giant’s revenue and profit growth exceeded market expectations in terms of financial data. Wal-Mart’s revenue rose 4.3% year-on-year to $140.5 billion in the third quarter, better than market expectations of $135.6 billion.
It’s like the difference between the rich and the poor. Larger retailers are experienced with enough flexibility and capital to ship goods from around the world. Smaller retailers, on the other hand, can only rely on their domestic home market.
In the suppliers’ view, they may give priority to supply to large companies. This is because if they are given priority to supply them in 2021 when there is a supply shortage, it will help them foster a good relationship.
Supply Chain Crisis For Retailers, Struggle Of Small Companies
Forty percent of small U.S. retailers are reportedly expected to be unable to pay their November store lease payments. More than 25% of retailers say they are at risk of closing permanently in the fourth quarter. This is because smaller retailers with lower profit margins have far fewer measures to take in an epidemic compared to larger companies. Smaller stores have very limited options, and virtually the only option is intra-regional and local supply chains, but this is not feasible in the short term. In the case of an already struggling company, its margins will be under additional pressure.
As inflation begins to rise and borrowing costs begin to rise, a large number of small, poorly run companies will go out of business or be bought out. One Harlem, N.Y., store owner said she started stocking up early in preparation, and in August she began ordering decorations, candles, jewelry and various knickknacks needed for the holidays. But in the past year, she has received only half of the goods, and there is no guarantee that the other half will arrive in time.
Supply chain problems may cause a large number of small stores to disappear, and many may close unless the government intervenes.
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