Economic Turmoil Exposes Retail Industry’s Knee-Jerk Tactics

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The fallout from two years of economic volatility, and now a developing recession, is forcing leading retailers to come to terms with the industry’s penchant for boom-and-bust planning. By this time next year, the retail landscape promises to look as different from today as it does today from a year ago.

Exhibit A is recent announcements and news about Amazon, which had been the pandemic’s biggest winner. The company just announced that it is abandoning plans to build an airport cargo center at Newark Airport. The plan ran into a phalanx of opposition from labor and community groups and the pushback was cited as the principal reason for cancelling.

But it comes on the heels of a general pullback by Amazon after a two-year expansion binge that doubled its capacity in just 24 months, and after posting its first quarterly loss in seven years. Amazon has been shuttering warehouses and has reportedly been scaling back its huge list of private-label merchandise.  

A binge of a different sort has clobbered Target, Walmart, and Gap. In an effort to outflank last year’s supply chain bottleneck, and despite a steady decline in consumer sentiment, they and other retailers rushed to beef up inventories to meet booming demand. 

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retail  economy  voice of the customer  retail disruption