The Washington Post: ‘Retail Vortex’ - How deepening discounts and thinning profit margins could take their toll this holiday season

The Washington Post: ‘Retail Vortex’ - How deepening discounts and thinning profit margins could take their toll this holiday season

The “retail apocalypse” has become a blanket phrase for the industry’s woes, which so far have resulted in more than 50 bankruptcies and 21,000 store closures since 2017. Now some analysts are warning of a “retail vortex.”

Excerpts from The Washington Post article include:

"A mix of thinning profits, soaring returns and ever-growing markdowns puts already-struggling retailers at risk of further decline this holiday season, according to DynamicAction, a retail software firm that analyzed more than $11.6 billion in online transactions from January to September."

"The company defines retail vortex as a post-holiday period of deepening discounts and thinning profits, as retailers try to unload piles of unsold inventory to a diminishing pool of customers. As a result, retailers end up absorbing higher costs related to marketing, logistics and returns, eroding already-shrinking profits. Last year, for example, holiday returns rose 26 percent in the three weeks after Christmas from the year before, according to DynamicAction, a number that is expected to rise this year."

Read the complete article by Abha Bhattarai, National Retail Reporter for The Washington Post, here.

Read more about The Retail Vortex and The DynamicAction Retail Indexes here.