Q: How should I plan for the holiday season, given that COVID cases are surging again and the stock market has jitters after receiving disappointing employment data?
Steve Pruitt: The short answer is to be careful. So far, at least, our stores are holding their trend lines. In fact, most of our stores are beating their sales plans for the month, as well as their 2019 numbers. But we know there will be a slow down; the question is when.
For now, make the most of the business you have. We have never seen demand extended for so long before. Keep a close eye on your aging inventory index, which tells you if your turn is slowing, as well as your receipt plans.
If your open-to-receive gets into negative numbers more than 60 day out, pull it back. You have learned to run your business on lean inventories. If you get overbought your cash flow will dwindle, putting you in a weaker position when sales slow down. Getting stuck with too much inventory will also eat into your margins.
It’s best to pull back a little and wait until you have a better idea of where the trends are heading in your market.
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