Overstocked stores give big discounts as 'retail armageddon' strikes

sale in a store
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We may be dealing with record-high inflation, but experts say a variety of factors have aligned to make this one of the best times to be a bargain hunter.

Major retailers are discounting prices and launching massive sales because they are overstocked with merchandise, much of which was ordered with the pandemic-era shopper in mind.

"It's a retail armageddon," Burt Flickinger, managing director for Strategic Resource Group, told CBS News.

Flickinger said some stores are overstocked by more than 30% and there's no place to put everything. Not to mention, shoppers once flush with cash from government funded stimulus checks have now tightened purse strings as record inflation puts a strain on household budgets.

"You have too many goods and too many stores chasing too few shoppers with too few dollars," he said.

Retailers including Walmart, Target, Macy’s, Amazon and Best Buy are stocked with a combined $45 billion in excess inventory from orders placed during the height of the pandemic, according to Bloomberg. Much of the merchandise was stuck on cargo ships as supply chains snarled and ports shut down from staffing shortages and other challenges brought on by the pandemic. With all the inventory suddenly arriving simultaneously, retailers have realized they misjudged Americans' buying habits and shopping trends.

Macy's and Gap, for example, have an excess of active and leisurewear that was popular earlier in the pandemic, as shoppers are now buying apparel for the office and clothing for special occasions.

Similarly, Target has too many televisions, outdoor furniture and kitchen appliances as demand has shifted along with shoppers' buying patterns.

The offloading of marked down merchandise certainly won't excite shareholders, who are likely to see shrinking profit margins. Shoppers, on the other hand, are sure to benefit from discount prices and sales promotions.

The biggest discounts will be on consumer electronics, sporting goods, apparel, clothes and accessories, according to Flickinger.

Some of the overstock is also making its way to outlet stores, liquidators and discount chains, which aren't always used to receiving brand spanking new merchandise.

"The condition of the product — it's never left the case, it didn't make it to the stores, it's not dog-eared or wrinkled or ruffled having been on a shelf," Norm Rankin, executive of discount store Bargain Hunt, told CBS News.

You might even score a jackpot deal like one retiree did in Alabama. Donna Griffin, 61, told The Wall Street Journal she bought several coats at a Bargain Hunt store that were originally priced $100 for just $2.50 a piece!

Featured Image Photo Credit: Getty Images