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Inventory-to-Sales Ratio

Inventory-to-Sales Ratio

| September 28, 2021
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Most people haven’t even begun to think about doing their Christmas shopping; after all it isn’t even Halloween.  But maybe you should.  Retailers attempting to stock up for the holiday selling season are facing all kinds of shortages, transportation chaos, and surging prices.  As analysts at WolfStreet.com point out, the inventory-to-sales ratio (inventories divided by sales, a standard metric of supply, which cancels out the impact of inflation) started collapsing last year.  In May, the ratio hit an all-time low in the data going back to 1992, and has only regained a small amount since.  Memories of 80’s era fistfights over Cabbage Patch Kids dolls come to mind…  (Chart by WolfStreet.com)

Jeffrey Cerny

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