KNOXVILLE, Tenn. — In the last couple of years, many people lived in fear of running out of stuff. They faced shortages such as toilet paper, baby formula, butter and more.
Lance Saunders an assistant professor of supply chain management from the University of Tennessee said because of the shortages people often stocked up - and stores did the same thing.
"Everyone you know, remembers last Christmas," Saunders said. "We didn't think anything was gonna be on the shelf.”
People rushed to the stores and bought as much stuff as they could.
“We had a lot of people that bought a lot of things last year for consumer goods," Saunders said. "And that ended up being that retailers ordered a whole bunch of inventory.”
Then everyone figured out that things are arriving, and Saunders said that high demand slowed down.
"You put that in conjunction with a lot of the other things that are happening in the world with inflation and people in fear of a recession, and all that ends up with a lot of inventory in stores," Saunders said.
So, some companies now have a whole lot of stuff.
“But the problem is with inflation, consumers can't afford this stuff,” Saunders said.
Saunders explained back in 2020 when the pandemic disrupted the globe a lot of companies thought that we were going straight into a recession. So, many lumber factories shut down.
"And so what happened? Well, people were stuck at home and so they started renovating their houses," Saunders said. "And we couldn't catch back up fast enough and so lumber prices soared.”
Then when the pandemic slowed down Saunders said people shifted their money to other modes of spending, and when combined with inflation, businesses were left with more inventory on the shelves.
"I think what you're seeing is the inflation slowing down,” Saunders said.