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Walmart and Target Assure Customers They Will Keep Goods Stable and Adequate Amid Global Supply Chain Crunch

Recently, the U.S. media has reported widespread supply chain tightening issues that could lead many retailers to run low on inventory during the fall and winter selling seasons.

To let customers know that their own supply chains are okay, two of the largest U.S. supermarket chains, Walmart and Target, have both issued public comments outlining the proactive steps they are taking to get merchandise out of China and onto shelves.

In a press release Tuesday, Target said, "While unprecedented supply chain challenges continue to impact retailers and the retail industry globally, including conditions at U.S. national ports, we are ready to provide our guests with a highly desirable, relaxing and inspiring holiday shopping experience."

Target noted its ongoing strategy to reduce delays through its global shipping and supply network, including through the hiring of more than 30,000 new supply chain employees, 24-hour-a-day operations, and moves to use nighttime hours to remove 50 percent of containers from the congested and uncomfortable ports of Long Beach and Los Angeles.

Target plans to increase nighttime pickups by 10 percent over the next 90 days.

Target also looks back on a whopping $4 billion in past investments in its supply chain, including four new sorting centers in Houston, Dallas, Philadelphia and Lawrenceville and two new distribution centers in Delaware and Chicago, upfront investments that have put the company in a better position to address current supply chain issues.

In addition, Target has joined a new collaborative program to help address supply chain bottlenecks and shortages caused by the pandemic. The program, sponsored by the Biden administration, also includes Walmart, Home Depot, FedEx and UPS as members.

Target said the company's efforts meant that inventory was "up significantly from a year ago, helping us to be ready to serve millions of consumer households this quarter.

Wal-Mart has taken a similar approach. Late last week, Joe Metzger, Walmart's executive vice president of U.S. supply chain operations, published an article outlining how Walmart is alleviating global supply chain congestion.

Metzger said, "Understanding the challenges facing our entire supply chain system, we are taking additional steps to overcome obstacles and minimize disruptions so we can serve our customers this holiday season."

The executive went on to note that Wal-Mart's efforts include chartering vessels, moving cargo to less congested ports, rerouting inland freight, increasing supply chain workers' wages, hiring new truck drivers and supply chain employees, and increasing warehousing capacity. 

Walmart and Target, along with other large retailers, have a distinct advantage in weathering this year's unprecedented supply chain disruptions.

Shipping volumes and financial resources allow them to better execute adjustment measures, from chartering ships to hiring workers to building new capacity - all of which can put considerable pressure on smaller retailers' supply chains.

Other retailers are forced to face the pain of diminished supply chain resources, chief among them long shipping wait times and astronomical increases in freight costs - even paying high freight costs simply does not guarantee timely shipments.

Dollar Tree, for example, has increased its assessment of shipping costs this year while no longer expecting delivery commitments from carriers.

Other retailers are turning to expensive air freight and other options to get products into the U.S. and onto store shelves.

Even with these efforts across the country, many analysts still believe we will see many empty shelves during the holiday season.

As retailers pay higher costs, they will protect margins by reducing discounts and more closely tailoring discounts to their inventory.

They may also raise the selling price of their products, and many analysts expect customers to buy items at an increased price.

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