October 18, 2022
Last week I made fun of the Washington Post for writing a piece telling readers about the bad news that retailers are finding themselves with excessive inventories and may have to mark down prices to sell them off. The story is that with supply chain problems from the pandemic largely over, stores have been able to restock their inventories, but now see demand trailing off.
The incredible part of the story is that the piece largely ignored the obvious implication, that consumers are likely to see price reductions in a wide range of goods in the near future. Since INFLATION! has been front and center in economic reporting for the last year and half, the likelihood that people will soon be able to get large discounts on everything from furniture and appliances, to clothes and kitchen items, should be good news. But this likely outcome was completely downplayed to the point of being almost ignored.
The New York Times was apparently determined not to be outdone. It wrote a nearly identical piece telling us about the tough holiday season facing retailers, who may have to accept lower profit margins.
“But discounts eat into retailers’ profit margins, and they have been able to employ that strategy only sparingly in recent years. During last year’s holiday season, in particular, retailers recorded bigger margins thanks to supply chain logjams. Inventory was low, and shoppers were clamoring to get their hands on products. The result: fewer discounts.
“’A lot of that is going to reverse, if not more than reverse, across department stores and specialty apparel,’ said David Silverman, a senior director at Fitch Ratings. ‘Consumers are less compelled to buy, and they’re going to need the call to action.’”
Like the Washington Post article, the piece pretty much ignored the fact that large markdowns will be good news for people troubled by inflation. But, the New York Times one-upped the Post on this one.
It ran its troubled retailers piece on its home page just below a piece headlined, “alarmed by rapid price increases, Fed looks at raising rate again.” While making the case for more aggressive rate hikes from the Fed, the piece told readers:
“And there is little evidence, so far, that the Fed’s policy is working to tamp down price increases.”
It seems like the NYT is very committed to having a diversity of viewpoints in its new section. We can either see a piece telling us that inflation is unrelenting or alternatively read a piece just below it telling us that we can expect sharp price declines in a wide range of goods.
Either way, it’s bad news for Biden.