What is Excess Inventory in Retail? Explained

Excess inventory in retail is the surplus of goods that surpasses current demand or sales expectations. This situation may occur due to factors such as overestimating customer demand, shifts in market trends, or disruptions in the supply chain. Excess inventory poses challenges for retailers as it ties up capital, occupies valuable storage space, and may necessitate markdowns or clearance sales to reduce stock levels. To mitigate this issue, effective inventory management practices, including demand forecasting and agile supply chain strategies, are crucial for optimizing retail operations and minimizing the occurrence of excess inventory.