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With inflation fears and a surplus of unsold merchandise, Black Friday season has already begun

Retailers are slashing prices, and consumers hold all the cards.

Linda de Valpine arranged leaves in a table centerpiece for sale in her Newton homewares shop, Greentail Table.John Tlumacki/Globe Staff

Last year, the pandemic hit holiday shopping season hard. Retailers couldn’t stock their shelves fast enough; snarled supply chains jammed the pipeline for books, board games, and glassware. Stockings and ornaments sat on cargo ships for weeks, and shoppers scrambled to find must-have gifts for under the tree.

In 2022, the tables have turned.

Stores right now are dealing with a record $732 billion of unsold merchandise, a 21 percent increase from 2021, according to the Census Bureau. Really, a “sonic boom of inventory,” as Urban Outfitters CEO Richard Hayne put it on an August earnings call. And in a tougher economy — with inflation high and the threat of recession lurking — consumers’ appetite to spend is trending down.


For retailers, it’s another painful twist in what has been a rocky two-plus years since COVID hit, said Jon Hurst, president of the Retailers Association of Massachusetts.

“You can feel that the pandemic is still with us,” he said. “The challenges have just changed.”

After struggling with shortages since March 2020, the biggest brands say warehouses are now unusually full. Target canceled orders from suppliers as early as June to slash inventory. Nike says its North American inventories grew 65 percent in the three months ending Aug. 31. A few stores, such as Gap, are relying on a “pack and hold” strategy by storing overstock items to be sold later in 2023.

But most retailers have responded to the glut the old fashioned way: discounting early and often. Amazon held a second Prime Day event on Oct. 11 and 12, and half-off deals are popping up everywhere from Walmart to J.Crew. Wayfair, the Boston-based e-commerce giant, will kick off a two-day sales event next week with markdowns up to 80 percent. Express Inc., a clothing retailer, is stocking its outlet stores with last year’s holiday items and New Year’s Eve dresses, the company said in September.


Plus, the dreaded (by some) “holiday creep” is already here. It’s not even Halloween, but store shelves are sprawled with turkey-shaped table decorations. Kohl’s is selling piles of pine-tree-scented candles, long before the holidays they tend to evoke.

“A few years ago, I started to say, with some accuracy, that Black Friday starts on Labor Day,” said Mark Cohen, director of retail at Columbia Business School. “But this season has kicked off sooner than ever.”

The drastic discounts seem like stores’ last-ditch effort to get rid of products they ordered months ago to avoid supply chain delays, Cohen added.

“This mad scramble to stock up was definitely outside the normal course of behavior” in 2021, he said. “Now, stores find themselves with broken balance sheets and overloaded stores, hoping to desperately reconcile the issue.”

Small businesses who source goods within the United States tend to be better-insulated from supply chain snarls — and the subsequent overstocking — than big-box stores, but they too face challenges.

Linda de Valpine, the owner of Newton homewares shop Greentail Table, returned to trade shows to stock up this year after a long pandemic hiatus. But now, selling all those rust-colored table runners and foliage place cards has become a point of stress. She needs to clear out autumn inventory to make room for Christmas cookbooks, and money from those sales will fund stock for the spring and summer.


“I have a lot of stuff to get rid of before it’s time to put out the holiday supply in November,” de Valpine said. “It’s nerve wracking, too, because every day you turn on the news and the focus is, ‘Are we in a recession?’ You can’t help but feel apprehensive.”

Beyond supply chain challenges, the unsettled economy is upending spending habits. Surging inflation has forced shoppers to spend more on gas and groceries and less on nonessential items, such as furniture, clothing, or apparel. The higher cost of eating out, travel, and transportation is gobbling up more of the discretionary income people do have. Rising interest rates and recession fears are feeding concerns that people may cut back as the New Year approaches, and a report from the consulting company Bain and Co. found that shoppers feel less cheerful overall about the state of retail.

So even if dollar sales are up this holiday because of inflation, retailers are not seeing an increase in the number of transactions, said Aaron Chervis, the head of Americas retail at Bain.

“If you look at the numbers first, it’s like wow, this could be the third-best holiday season in 20 years. But that’s in nominal terms,” he added. “In real terms, it could be the worst holiday over the last decade.”

That’s what Robin Gerolamo, founder of Winthrop gift shop Robin’s Nest, fears. She has avoided discounting her specialty stock — Fenway Park coaster sets, charcuterie boards, and gold-tinted jewelry — even as large retailers are cutting prices. Customers are trickling in at a normal pace so far, but Gerolamo has prepared herself for the worst-case scenario: the possibility that shoppers will retreat right when she needs them most.


“You can sense the concern in the air,” she said. “Everything’s costing more. But if I jack my prices up and people stop shopping, that’s devastating for my livelihood. If I lower them too much, that’s devastating, too.”

Patti Bergstrom of Gardner’s The Velvet Goose feels similarly about discounts. Many small businesses like hers do not have the same mass of inventory to run through as Target or Walmart, she said. One of her suppliers, the quilted accessories brand Vera Bradley, is recommending a host of deals: Get a free lumbar pillow. Buy this tote at half price, if you’ve already spent $100.

Linda de Valpine arranged candle holders at Greentail Table.John Tlumacki/Globe Staff

“But that’s not my style,” Bergstrom said. “I fill a niche. I sell specialty items. Hopefully, people will continue to shop for that.”

Among those who benefit from the swath of inventory are off-price retailers, including Burlington Stores and TJX. They’re scooping up excess product and delivering it to customers at low prices. In a recent earnings call, TJX announced that “the availability of merchandise across good, better, and best brands was exceptional.”

The company CFO reiterated that in August: “We’re going to have some of the best branded content we’ve had in a while.”

So while people deal with mounting electricity bills and record-breaking rents, a discount from retailers is at least one thing to look forward to this holiday season.


Diti Kohli can be reached at her @ditikohli_.