IN THE NEWS: Holiday Inventory Levels are Tea Leaves to Read the State of Retailers and Consumer Spending

CNBC
September 4, 2025
Lori Ann LaRocco

FROM THE ARTICLE: Holiday inventory levels are the latest set of tea leaves that are raising concern about how retailers are positioned going into the last quarter of the year and the strength of consumer spending.

Data from the Logistics Management Index (LMI), a monthly economic indicator based on a survey of supply chain professionals about the state of inventory, warehousing, and transportation, shows different holiday inventory strategies between large and small retailers.

In the latest LMI for August, the report highlighted Walmart’s plans to rationalize its product mix, bringing in higher volumes for sure-sellers and taking fewer risks with goods that consumers might not buy in bulk.

“This allows them to place orders earlier and also achieve quantity discounts,” the report said. “While Walmart and their supply chain partners have absorbed some of the price increases associated with tariffs, that is not a sustainable strategy. This inventory strategy shift may help them to avoid increasing prices for consumers too significantly.”
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Josh Allen, CCO of ITS Logistics, said that based on client communications, the lighter and earlier peak season was anticipated. “We are seeing retailers zeroing in on products that sell quickly and move off the shelves and slimming down on SKU’s that aren’t a guaranteed cash flow,” he told CNBC.

Allen said some apparel retailers are focusing on core colors and assortments that can be easily replenished or shifted across stores, instead of betting big on fringe seasonal styles.

“In consumables, it’s about stocking core pack sizes and flavors that churn every week, while trimming down the experimental launches that eat up warehouse space,” said Allen.

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