100 days to Christmas: Deals start early as supply chain eases

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Delivery companies prepare early for holiday shopping despite FedEx recession warning

FOX Business’ Madison Alworth reports on how the FedEx warning impacts delivery companies ahead of holiday shopping.

With 100 days to go until Christmas, retailers and customers are not feeling joyful after a year of supply chain backlogs and higher costs.

Ports are in better shape this year and freight costs are down 80% year-over-year, dropping from $20,000 per container in 2021 to $4,000.

At this point, shipping experts expect the holiday shelves to be full, and big box retailers stocked up early to hedge against supply chain vulnerabilities that were exposed last year.

"Although supply chains were overall running well, there have been so many issues and so many potential further issues around weather and labor. Many retailers have not taken any risks and stocked up early for the holiday season," Freightos Group CEO Zvi Schrieber told FOX Business. "Instead of starting their holiday shipping now in September or in August, many of them stocked up their inventories in June and July."





FEDEX CLOSING STORES, OFFICES, DELAYING HIRES, PULLS FORECAST

A woman shops in a city.  (iStock / iStock)

Many businesses also ordered less this year as a result of bloated stock. Most recently, FedEx said in its quarterly earnings report that demand for shipping is drying up. The shipping giant is now closing stores, freezing hiring and grounding planes as inflation hammers America.

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"Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S.," FedEx CEO Raj Subramaniam said in a statement. "We are swiftly addressing these headwinds, but given the speed at which conditions shifted, first-quarter results are below our expectations."

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Despite slowing demand, companies still have their eyes on constraints that could come into play, namely the Zero COVID policy in China and labor disputes in the U.S. and abroad. Concern about potential weak links in the supply chain is also prompting shipping companies to stock up.

"There's always a black swan that could raise its head," CEO and founder of Alba Wheels Up International, Sal Stile, told FOX Business. "The supply chain that used to be a just-in-time supply chain had to be moderated to having some stock because you never know when you're gonna run out."

Now, companies faced with an inventory glut are looking to get supply off their hands by rolling out shopping promotions and discounts early, a stark contrast to the pricing power that they held last year. Walmart announced its top toy list for the 2022 holiday season a month earlier than last year, and Best Buy will also put out discounts starting earlier than usual.

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BUY NOW, PAY LATER EXPANDING TO STOREFRONTS AND GAS PUMPS

"For the first time in a while, we're anticipating deep discounts this holiday season," Ted Rossman, senior analyst at Bankrate.com told FOX Business. "The supply chain has gotten better to the extent that now a lot of retailers like Target and Walmart are complaining that they have too much stuff in certain categories, especially clothing and electronics and things like that. 

"Couple that with high inflation (and) recession worries, (and there is) less demand for these products. And, all of a sudden, they're having to offer some pretty deep discounts to get consumers interested. So, I actually think we can use that to our advantage as holiday shoppers this year."

FEDERAL RESERVE BANK OF MINNEAPOLIS CEO SAYS INFLATION IS ‘VERY CONCERNING’ AND ‘SPREADING OUT’ ACROSS ECONOMY 

Packages are seen inside Amazon’s JFK8 distribution center in Staten Island, N.Y., Nov. 25, 2020.  (REUTERS/Brendan McDermid/File Photo / Reuters Photos)

More than four in five shoppers plan on finding ways to save their money this year, whether hunting for good bargains, early offers or less expensive brands, a new survey finds.

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Even with the deals, Americans are expecting to take on debt to put gifts under the tree this year.

Data from Bankrate shows 40% of Americans will buy fewer gifts this year because of inflation, and 31% will go into debt this shopping season. The number of those going into debt could be much higher due to mounting credit card debt, with over half of active credit card accounts carrying debt from month to month, according to the American Bankers Association.

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