How the ‘Bullwhip Effect’ Could Lead to a Surplus Summer & MAJOR Retail Discounts
As inflation soars and global supply chains recover, brace yourself for the bullwhip effect which can mean good news in some areas of retail.
If there’s any decent news on the horizon, it’s the epic sales about to come our way! 🛍
Remember when the COVID-19 pandemic first hit and store shelves were becoming more and more sparse each day? We don’t want to even think about the toilet paper shortage nightmare again, let alone all the other consumer goods that seemed to be impossible to get.
Well now, it appears that the supply chain is slowly untangling itself. In some categories, it’s actually overcorrecting, leaving wholesalers and retailers with too much inventory. This unusual situation is expected to lead to a “surplus summer,” with liquidation sales like we’ve never seen before!
This type of inventory whiplash is called the “bullwhip” effect, and economists have seen it coming for a while now.
The easiest way to explain it is to compare it to a pendulum. Any time the supply pendulum swings too far in one direction, it eventually has to swing back. The fluctuation going from extreme scarcity to extreme overstock continues to swing back and forth, lessening each time, until the balance is eventually restored.
So what does that mean as it pertains to retail shopping? Clearance sales, friends! 🎉
As we collectively recover from our supply chain hangover, we can expect to see serious price drops across entire categories of goods coming our way!
The only question is – are we in for a “deflationary tsunami” with a tidal wave of crashing prices? Or will the retail bubble deflate slowly over the summer, like that novelty pool float that was too cute to pass up?
Here’s what the experts have to say about the bullwhip effect and deflation…
Major retailers like Target, Walmart, and Macy’s are already dealing with bloated inventories due to the bullwhip effect. They’re finally receiving those shipments of outdoor furniture, loungewear, and electronics that were hard to find during the pandemic.
So if you’ve been shopping for any of those items, you’re in luck! We should soon start to see some phenomenal deals in those categories this summer.
As soon as July 4th, we may start to see stores offering discounts like you’ve never seen before on furniture, home furnishings, appliances, building materials, garden equipment, and other general merchandise.
Not everything is headed for a deflationary crash, though.
Unfortunately, the cost of essential items like food and fuel may continue to climb before leveling off. The cost of luxury items (like designer shoes and handbags) will continue to increase too.
We’re feeling the sting in our budgets too, so here are a few ways to combat the industries that won’t be seeing the benefit of the “bullwhip effect”.
How to save on gas:
- Gas saving apps: Hit up the pump with confidence by downloading gas saving apps like Upside and BPme.
- Save through your grocer: Thanks to their membership perks, Sam’s Club, Costco, and Walmart+ members can save at the pump, too!
- Get smart about your gas consumption: Know the best times to pump gas, how to keep you car in fuel-efficiency shape, and other ways to save on gas!
How to save on groceries:
- Amazon Subscribe & Save: Score discounts up to 15% with recurring deliveries on your most used household goods and groceries. Here are some of the best deals under $3!
- Shop the deals: Bookmark our Grocery Deals page to save on what you and your family purchase most when they’re at their lowest prices!
- Use cash back apps: Download money-saving apps like Ibotta, Fetch, or Coupons.com to earn cashback on your grocery purchases. Here’s a full list of some of the best cash back apps out there!
How to save on designer goods:
- Score them at discounted prices: It’s pretty obvious, but scoring your favorite high-end brands like Coach, Michael Kors, and more is easy when you frequent our site. Just search your favorites and shop the latest deals.
- Shop the dupes: Who needs the name brand when you can score designer dupes for less!
The problem is that they been talking of a big recession and with recessions come tightening those belts people! Ever since I went off to college (more than 20 yrs ago) I have been the most frugal person. I am so great full to have found Hip2Save more than 10 years ago. I am proud the be call one of the OGs of this amazing website 😉. Thank you for this post and hopefully there will be many discounts coming this summer because this INSANE gas inflation prices have this mama of 3 sick every time I need to go to the pump and DO NOT get me started with groceries 🤢. I have always said once those prices go up…they do not come down.
And we’re so grateful to have longtime readers like you, Jackie! We couldn’t agree more about the rising gas and grocery prices! We’ll certainly be doing our best to continue to post our best deals and tips to keep more money in everyone’s pockets!
I wonder if people will begin buying cars instead of SUVs to save on gas. Most of my friends have a sedan for single person trips and a SUV for whole family purposes.
I sure hope so because I’m looking to replace my car with an suv (moved into snow country) and even though I have a recession proof job I still can’t stomach the prices of used cars right now.
With grocery prices, we’ve circled back to a stock up approach on available deals. I watch the deals closely at Kroger, and their weekly buy (up to) 5 digital deals make a great way to save like we did back in the days of paper couponing (which was like a part time job for me!). And finding $2/lb 80/20 3 lb rolls of hamburger recently was awesome…we’re stocked up in the deep freeze thru fall. We also shop Aldi, and now that our son bags groceries at HEB, our family gets a discount on store brands there.
Sounds like you have a good handle on how to navigate the rising prices, jayray! Having been a dedicated couponer myself when paper coupons were all the rage, it was definitely helpful to learn how the sales cycles worked and when to stock up! Glad we are still able to utilize those skills even as using paper coupons has dwindled down in recent years.
ALDI grocery shopping and with BOGOs at Publix help out a lot.