Lowe’s is One Retailer That Says Supply Chains are Improving

But supply chains are still under pressure for many businesses in the U.S.


Supply chains have been hit hard amid the COVID-19 pandemic, adding pressure to many businesses that can’t keep up with consumer demand. But, one retail chain says its supply chains are better than they were this time last year. Home improvement retailer Lowe’s said that it’s even getting holiday products into its warehouses and stores earlier than usual. Many other retailers, however, fear empty shelves when Thanksgiving and Christmas approach.

As it stands, many retailers have struggled to stock their shelves with enough inventory. The Covid outbreak created factory closures and stunting inventories and supply chains.

But David Denton, Lowe’s CFO, said that his stores are doing better today regarding supply and inventory than they were six or even 12 months ago.

Denton said, “We’re actually getting better, not worse. Lowe’s is positioned better than most, if not everybody else in the marketplace.”

Denton made the comments at Goldman Sachs’ Annual Global Retailing Conference.

Lowe’s added that it has already placed large orders with its suppliers for high-demand products to ensure that its stores’ inventories remain high.

But a survey by Reuters showed that a dozen or so U.S. retailers and suppliers anticipated long delays in getting holiday inventory because of logistics issues with shipping.

At the Goldman conference, Macy’s Inc. also commented that it was monitoring supply chain issues, especially for its clothing and shoe departments.

Meanwhile, production prices in the U.S. increased in August and led to the most significant annual gain seen in almost 11 years. That means that inflation is more likely to remain for the near future.

According to the Labor Department, the producer pricing index was 0.7 percent higher in August, a slight decline from two months of 1.0 percent increases.

Also, trade services saw a 1.5 percent increase. The metric measures changes in wholesaler and retailer margins. Prices in goods also rose 1.0 percent in August. The metric had increased 0.6 percent in July as food prices rebounded by 2.9 percent. Warehouse and transportation prices also rose by 2.8 percent.

Accumulation of inventories slowed in July for wholesalers, meaning they’re emptying their shelves faster. Robust consumer demand and supply issues are contributing to the problem, as are labor shortages.

Factory disruptions have been driven by the latest strain of the novel coronavirus, the Delta variant. Asian factories are a primary source of raw materials for U.S. manufacturers. Port congestion is adding to the problem of supply chain pressures.



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