Holiday Shoppers Are Stretched. Retail Inventories Are Running Lean.

Shoppers are heading into the 2026 holiday season with tighter budgets and an earlier start, and Census data shows retailers holding less inventory relative to sales than a year ago. Retail Dive lead reporter Daphne Howland laid out both pressures Tuesday, drawing on consumer research and a Retail Dive virtual event earlier this month at which an equity analyst warned that out-of-stocks are a genuine possibility.

In a survey by The Financial Health Network and the University of Southern California, fewer than 70% of U.S. households said they had paid all their bills on time over the past 12 months, down 3 points from a year earlier, and the share reporting unmanageable debt rose to 31% from 29%. Numerator data shows prices up 35% since January 2018 for low-income consumers and 31% for high-income consumers. Accenture found that more than 30% of U.S. consumers expect a bigger holiday budget than last year, but more than half of those planning to spend the same or more say the reason is that everything costs more.

The squeeze shows up in Walmart’s own business. On its August 20 second-quarter call, CFO John David Rainey said shoppers made visible trade-offs once gasoline climbed above $4 a gallon, with June the clearest month, and described the consumer environment as arguably softer than it was in February. He said that is why Walmart leaned so heavily into lower prices. At the Goldman Sachs Global Retailing Conference on September 15, Walmart U.S. President and CEO Dave Guggina called the consumer resilient but intentional with its spending. He said Walmart received essentially all of its roughly $2.9 billion in tariff refunds in the second quarter and reinvested the money in price and experience, through 11,200 rollbacks in the U.S. business and by holding off on price increases as transportation and fuel costs rose.

More Shoppers Started Holiday Buying In The Summer

Accenture found that more than twice as many people did holiday shopping over the summer this year as last year. Shoppers also told Accenture they expect generative AI to influence 45% of their holiday spending, with finding deals the leading use, ahead of comparing options and deciding where to buy. Kelly Askew, Accenture’s global retail industry lead, told the Retail Dive event that consumers are being more deliberate about where, why and how they spend.

The retail calendar has moved with them. Walmart’s Deals & More event runs October 5 through 11, overlapping Amazon’s Prime Big Deal Days, and a Walmart spokesperson told Fox Business the timing reflects how customers are shopping: “We know many customers are starting to think about the holidays earlier.” On the AI side, Walmart CEO John Furner said in August that the number of customers using the company’s Sparky shopping assistant was up 70% from a year earlier.

One Analyst Says Retailers Would Accept Missed Sales To Avoid Clearance

Phillip Blee, consumer equity research analyst at William Blair, made that case at the Retail Dive event. He said retailers are keeping inventory light because high transportation costs, high input costs and unpredictable tariffs make carrying extra stock risky, and that they would prefer to give up a little in sales than end the season with a glut requiring heavy clearance on already expensive goods. “Everyone’s a little bit concerned that inventory is light, and that out-of-stocks could happen,” he said.

The caution has roots in the pandemic, Retail Dive noted, when retailers stocked up on goods whenever they could as supply chains roiled, then ended up with too much inventory as customers tired of what was on offer. Blee said that experience has left retailers on edge about holiday inventory planning. Blee and Askew both expect fewer last-minute shoppers this year. Blee also argued that value means more than discount depth: shoppers want a quality product at the right price, and they want newness.

NRF Expects Imports To Peak In September. Inventories Are Still Thin Against Sales.

Goods are still arriving in volume. In their September 9 Global Port Tracker, the National Retail Federation and Hackett Associates forecast that U.S. ports will handle 2.31 million twenty-foot equivalent units in September, up 9.6% from a year earlier, which would make it the busiest import month of the year. Jonathan Gold, NRF’s vice president for supply chain and customs policy, attributed part of the late surge to vessel delays from bad weather in China and rerouting away from the Panama Canal. He also said retailers keep bringing in merchandise because consumers keep buying despite tariffs, inflation and high fuel prices.

Measured against what they sell, though, retailers are holding less. Census Bureau data shows retailers other than motor vehicle and parts dealers held 1.09 months of inventory for every month of sales in July, down from 1.12 a year earlier and 1.20 in July 2019. That is the lowest July reading since 2020. The two measures track different things. Import volume counts what is landing at ports, while the inventory-to-sales ratio measures stock on hand against the pace of sales. Neither figure shows how deep any single retailer’s holiday buy runs.

Walmart’s Inventory Outpaced Sales In Total, While Most Categories Grew Modestly

Walmart’s second-quarter earnings release put enterprise inventory at $61.6 billion, up 6.7% as reported and 6.0% in constant currency, slightly ahead of roughly 5% constant-currency sales growth. Walmart U.S. inventory rose 6.3%, which the company attributed primarily to strategic initiatives and inflation. On the call, Rainey said the increase reflected cost inflation and inventory positioned across Walmart’s fulfillment network, and that part of it came from more elevated, higher-priced brands that are helping Walmart gain share with higher-income shoppers.

Category by category, the build is smaller. Furner told analysts that most Walmart U.S. merchandise categories were up between 1% and 4%, with consumables, a fast-moving area, at the high end. Walmart U.S. net sales rose 3.5% in the quarter. Furner said he had no big concerns about inventory and noted that a couple of categories had been “a bit light on inventory” in June and July.

Guggina said Walmart’s merchants brought innovation, new items and sharp price points to the company’s recent holiday meeting. His pricing comments speak directly to 1P suppliers. He said Walmart’s job now is to work with suppliers to turn current rollbacks into everyday low prices that customers see through the back half of the year. Furner said in August that it was too early to know how many rollbacks would become permanent and that Walmart would work with suppliers to determine where that is possible. Marketplace sellers manage their own inventory, though a growing share of Marketplace business now runs through Walmart’s fulfillment network. Rainey said nearly half of Marketplace business flowed through Walmart Fulfillment Services in the second quarter, up nearly 400 basis points from a year earlier.

Shoppers Still Want To See It In The Store

More than 40% of shoppers visit stores to look at merchandise before buying, according to Accenture, and shoppers prefer stores over generative AI tools for advice and recommendations. Askew said about a third go for inspiration and the energy of a store at the holidays. For Walmart, stores also fill most online orders. Rainey said in August that Walmart’s stores are the last-mile fulfillment point for 80% of its e-commerce orders and all of its fast deliveries, and that more units now move through its stores than ever before.

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