Nike’s sales drop in North America has nothing to do with a dampening of consumer demand, but rather a shortage of shipping containers and congestion at US ports that delayed shipments in the quarter by more than three weeks.
Like many global brands and retailers, Nike faced supply chain challenges caused by the pandemic, delaying collections reaching customers. The American sportswear giant was quick to respond by reducing inventory imports however US retailers shifted gears and have been rushing to stock products in anticipation of a shopping rebound, said Quartz. The result, however, was a surge in competition for shipping containers and traffic jams at ports on the US west coast.
Supply chain problems began in Q4 of last year when Nike was slow to ship collections to its wholesale partners. Nike’s CEO, John Donahoe, said the company expects a more consistent flow of inventory in the next quarter even if shipments are slower than usual.
Stores in Europe are set to reopen this spring and talk of revenge shopping is something brands are hoping is not just a Chinese phenomenon. A wave of pent-up consumer demand and re-opening of economies should see a surge in sales.
Image: Shipping port via Pexels
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