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Jeannie Macone, of Florida, is cutting back on inventory for her trinket and home décor business.
She loves selling greeting cards like the ones with brightly colored songbirds "so pretty you could frame them". But with fewer people sending cards, the store is cutting back on inventory.
Neely Tamminga, senior research analyst at Piper Jaffray, says buyers are taking a conservative approach across the board, cutting back on inventory and waiting longer to put in orders.
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Kraft Foods, on Wednesday reported quarterly earnings short of analysts expectations due to retailers cutting back on inventories and the weak economy and said increased marketing spending to drive sales would cause full-year profit to be below its estimates.
At the same time, some retailers are cutting back on video game inventory and also focusing on the hits, according to John Riccitiello, chief executive of Electronic Arts, which is based in Redwood City, Calif.
"Companies have been pretty aggressive, getting rid of inventory, cutting back on capital spending and firing people by the bucketful," said Ian Shepherdson, the chief domestic economist at High Frequency Economics in Valhalla, N.Y.
Builders have been sharply cutting back on production, trying to get inventories more in line with sales.
The city is cutting back on services, department stores on their inventories, restaurants on the $50 entrees.
They now find their inventories are overstuffed and are cutting back on their orders.
Businesses are still cutting back on fixed investment and staffing but are making progress in bringing inventory stocks into better alignment with sales.
(See "OPEC's Kingdom Built On Sand") "Even with this cutting back on production, the data says we're going to have a big inventory build coming up," said Simon Wardell, analyst with Global Insight, citing slowing demand in tandem with the world economy.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com