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Discounts will be harder to find at these holidays. Blame the supply chain




Traders around the world are struggling to get their goods stuck to the container vessels carrying the goods due to congestion in the ports. The problem adds to the shortage of workers needed to unload and transport ship products to warehouses and distribution centers.

Many stores will not be able to get the merchandise that should have already arrived by the start of the shopping party. And when stores sell the items they have, they risk running out of stock for much longer than usual.

Inventory limitations make stores have fewer incentives to offer deals on the products they have.

Macy’s (M) Executives, who spoke at a Goldman Sachs conference last month, said the retailer has already been weaker with its discounts this year due to tighter inventory, which has helped increase its profits.

“From a promotional standpoint, this year’s promotional levels have been below historical levels and we’ve been thoughtful about the categories that need promotion and will continue to do so,” Macy’s chief financial officer Adrian Mitchell said during the conference.

Women’s clothing chain J. Jill (JILL) he also noted less robust discounts in the coming weeks.

“Supply chain disruption is on the rise, leading to high shipping costs and delays,” said Mark Webb, CFO of J.Jill, during the retailer’s most recent earnings call with analysts in September.

Stores have trouble delaying the procurement of goods due to congestion in ports.

Although the company is working with its suppliers to expedite shipments, Webb said expects these outages to continue in the coming weeks. He added that the retailer focused on offsetting the higher costs arising from supply chain pressures by being less promotional and selling products at full price.

Steve Lawrence, head of merchandise at Academy Sports + Outdoors, also told CNN Business that shoppers will see fewer deep discounts during this year’s holiday season.

“There have been far fewer promotions on the market because there has been a shortage of supply … Last year was not very promotional. We don’t think this holiday is even promotional.” Lawrence said.

Wells Fargo analyst Ike Boruchow said in a note this month in September, retailers offered fewer promotions than in the same period last year in the holiday shopping period.

“Liquidation activity fell again in September probably due to the supply chain problem,” Boruchow wrote in the note. “Manufacturing shutdowns in Vietnam, as well as delays in ports, limit the ability of brands and retailers to introduce products.”

Nathaniel Meyersohn of CNNBusiness contributed to this story