Retailers Reducing Inventories

The weaker economy has storeowners bracing for lackluster holiday sales.

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The nation's top retailers are pairing down inventories ahead of an expected drop in sales this holiday season as a result of the economic slowdown, store officials say.

In a survey of 100 retail executives at companies with annual revenues over $100 million, 75 percent said they're going to be more cautious with inventory purchases in light of a widely anticipated downturn in demand, according to BDO Seidman, a national accounting and consulting firm.

Retailers surveyed said they're expecting sales to drop by 2.8 percent this holiday season as shoppers cut back on spending. In a similar survey last year, retailers projected a five percent increase in sales over the holidays.

“While there is much uncertainty in the retail sector this season, retailers have been consistent in citing reduced inventory purchases as a result of tightened credit and slow spending,” said Al Ferrara, a partner at BDO specializing in retail and consumer products.

Retailers are hoping to boost sales by offering discounts and other deals catering to more cost-conscious shoppers, the survey found. Over 85 percent of respondents said their stores will offer a wider range of discounts this season.

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