Dive Brief:

• Several retailers have reported inventory gluts, due in part to delays last year at West Coast ports, that could drive heavy discounting this year. 

• As a result, the ratio of inventory to sales has risen to the highest levels in five years, according to the Wall Street Journal.

• But Target Corp. says that its own expanded inventory is the result of efforts to better manage its in-stock levels, including safety stock of key items.

Dive Insight:

Many retailers, Target among them, are facing complex supply chain issues as they move to provide more seamless shopping opportunities for customers whether they’re in store or online. 

Using stores as mini-warehouses to provide services like in-store pickup or same-day delivery, for example, can wreak havoc on shelf stocks, risking disappointment for in-store shoppers, and interfering with impulse purchases from browsing.

Target CFO Cathy Smith says that the retailer’s higher Q3 inventory doesn’t signal a need for holiday promotions, as other retailers have indicated, but rather a sign that inventory strategies now in place are already effective. The 4% gain in inventory is actually an improvement from previous quarters, according to Smith.

“We feel very good about our inventory position going into the holiday season in relation to both our sales planned and our work to improve in-stock reliability,” Smith told the Wall Street Journal.