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September 25, 2025
How Can Retailers Cushion Inventory Issues in Advance of the Holiday Sales Season?
As September draws to a close, retailers and industry analysts are keeping their eyes on the ever-important holiday sales season. There’s just one problem, as Chain Store Age editor Zachary Russell underscored: U.S. retailers are staring down tariff-related stockouts, and the unhappy customers that come with them.
Citing recent survey data from GreyOrange, Russell indicated that there was a concerning trend of inventory problems facing American retailers, according to management figures.
Among the survey’s key findings:
- More than three-quarters (78%) of retailers polled indicated that they’d noticed customers are shopping earlier, or buying in larger quantities, to combat the likelihood of future price increases or stock shortages.
- Almost one-in-four (24%) retail managers stated that they were unable to locate stock which their inventory systems claim is readily available on a daily basis, and a majority (63%) said that they encounter this situation at least on a weekly basis.
- That’s a problem for shoppers: Management staff reported a mean of 14 upset customers a month in relation to the stockouts, and 77% said they had lost sales due to an inability to find stock quickly enough.
- There’s trouble brewing, too. Approximately half of the managers polled said that they’d be warned by higher-ups that price increases were coming (50%), or that inventory levels were expected to shrink (47%) as a result of the ongoing tariff situation.
- Speaking of tariffs, more than half (51%) of respondents indicated that they’d trimmed staffing levels over the course of the last six months. Of these, 59% have cut staff due to budgetary constraints, and 42% did so in response to sluggish sales. In related findings, 36% of retail managers said they’d skipped or delayed daily store tasking due to a shortage of workers needed to execute.
All of this adds up to a concerning portrait of the current U.S. physical retail landscape, according to Troy Siwek, general manager of gStore by GreyOrange.
“We see lots of managers operating with false confidence in their inventory visibility,” Siwek said.
“They underestimate how often products go missing on the sales floor because they don’t always hear about it. A customer might not ask for help if an item isn’t where it should be. Most of the time, they’ll just walk out,” he added.
Despite Staffing and Inventory Issues, Retailers Appear Optimistic About Holiday Sales in 2025
Russell pointed out that despite the apparent dual headwinds of inventory and staffing issues pertaining to U.S. retailers, they appeared relatively optimistic about their prospects this holiday season in terms of sales. Almost half (47%) said that they were more confident on the subject of holiday stock availability versus the year prior — although a sizable minority (20%) did state that they were less confident on the same score. Russell highlighted that senior managers (55%) were more likely to feel optimistic over this question than middle managers (42%), suggesting that the closer one is to front-line operations, the less confidence is felt.
“The fact that retailers are already pushing holiday merch could be a sign of this optimism,” Siwek said.
“When they’re bullish, they flood shelves and build out big displays. When they’re bearish, they keep stock low and hold inventory in distribution centers. Retailers have spent the past few months shoring up their supply chains. They’re hoping those efforts will resolve their inventory issues in time for the holidays,” he concluded.
Discussion Questions
How can retailers cushion the headwinds of inventory concerns and staffing shortages? Is there a downward spiral of trimming store staff and softening sales, with one feeding the other?
Are U.S. retailers, in general, right to be bullish about the sales prospects presented by the upcoming holiday season?
Poll
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Mohamed Amer, PhD
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A lot of holiday inventory commitments have already been made, so success now comes down to effective inventory management. Understanding target sell-through rates and knowing when discounting should kick in is critical to avoid giving away margin or being left with excess stock. This year, demand curves may look different due to heightened consumer uncertainty. Retailers also need to stay alert to competitors’ discounting strategies, as consumers will be doing more price comparison. Where inventory is tight, complete visibility of stock across all channels and optimal allocation will be essential.
Which is why stats on “unable to locate stock which their inventory systems claim is readily available” is troubling.
Now is a key time that operational tech is needed. Now is not the time to guess on inventory or find new vendors for backend operations.
Retailers need to streamline their operations to effectively balance lower staffing and inventory concerns while driving Holiday sales. A few ideas come to mind: cut time-consuming endcaps (which also require extra inventory), order extra PDQs that can be dropped in the middle of aisles pre-stocked and ready to sell, and order pre-bundled products to reduce stocking time.
It’s October next week. PDQs take quarters to design and execute, and bundling likewise shifts labor upstream which means more time and logistics is needed. And I stand by the power of a well-done endcap; many studies out there demonstrating secondary positions increase the sell-through of primary positions. It excites the shoppers and is something as a manager you can improvise on the spot – because at this point in the game, improvisation is about the only tool left!
This survey offers something for everyone: bubbly optimism about the future – when are sales managers not optimistic ? – versus a concerning view of present conditions. (I lean more toward the latter, but will accept arguments for the former). The big issue, of course, is whether – or how much, really – this (alleged) buying forward has occurred: if it’s been a lot, then people may be extrapolating an already too high number.
I’m just (pleasantly) surprised there was no question on AI!
Maybe all the AI questions were…pulled forward ??
(If we run out at Xmas I won’t wish for more!)
Bad news is getting sanitized as it moves up the organization. Even worse, bold projections by senior management face a reality check at the store level: lost sales due to the inability to locate stock and upset customers. This suggests that system-level issues are overshadowing any store employee issues. While it’s more natural to frame this as a holiday inventory problem, it’s an organizational intelligence problem. Frontline employees are the best real-time sensors (not a staff-cutting exercise). They should be empowered to share their findings upward while having the authority to act locally within bounded autonomy. Will this holiday season be a victim of running via executive intuition or via intelligent information flows?
Sounds like two very different issues are being discussed here. Inventory cushions and inventory visibility. The cushion question is really about “did I buy enough or too much…???” It’s a question about demand. What has changed, or not, since placing Fall and Holiday orders many months ago, at the height of tariff uncertainty? And at this late date I don’t think we are yet clear how tariffs will impact pricing and customers perception of pricing. Bottom line, what’s bought is bought. Especially for mall apparel retailers. Fall is on the floor. Holiday is on the boat or in the warehouse. Spring is soon going into work at the fabric level. Now it’s all about rate of sale, constant vigilance on weeks of supply and planned exit dates, and an agile promotional calendar. Now it’s just a question of how soon, how deep, how crazy the promotional environment is going to get.
And, oh by the way… More tariffs were announced today. Not that bathroom cabinets and vanities are big holiday items, but 50% tariffs will probably be noticed. And 25% on trucks. And 100% on branded or patented pharmaceutical imports starting Oct 1. And people who will be impacted by the changing rules in their health insurance. Yeah, if I was a retailer I’d be a little concerned about the demand dynamics at work in the market right now. Headwinds indeed.
Will go back to my mantra which is how good is your data and how comprehensive are your systems. Inventory cushions are a slippery slope unless they come with a preplanned exit strategy. More is not always more except potentially more headaches.
Retailers can blunt the dual pressure of inventory shortfalls and labor scarcity by leaning hard into systems and strategies that improve visibility, flexibility, and allocation. For example, omnichannel inventory orchestration—treating all stock (warehouse, distribution center, in store) as a shared pool—and agile replenishment models can compensate for uncertainty in supply flows. Empowering front-line staff, even lean ones, to flag discrepancies and make micro-corrections helps reduce losses from “phantom stock.” Retailers can also lean more on automation (in logistics, backrooms, fulfillment) and pre-bundling or simpler merchandising formats that require less labor to execute. The key is not merely trimming costs but reengineering workflows so fewer workers can maintain service levels and recover from stock gaps quickly.
There is indeed a danger of a self-reinforcing downward spiral: cutting store staff to save cost can degrade service, leading to frustrated shoppers and softening sales, which then justifies further cuts. That said, a disciplined approach that protects critical roles (e.g. customer-facing, replenishment) and uses data to guide cuts (rather than across-the-board trimming) can help avoid slipping into a vicious loop.
As for the outlook on holiday spending: many U.S. retailers are choosing to be upbeat, and there are arguments to support cautious optimism. But inflation and trade policy—especially tariffs—pose real risks. Elevated consumer prices squeeze margins and may suppress discretionary spending, particularly if wage growth or job creation slows. On the flip side, if employment remains strong and consumer confidence holds, shoppers may tolerate higher prices. Given tariffs’ potential to worsen supply constraints (and thus push prices higher or create stockouts), the bullish stance is defensible but contingent. Retailers are effectively betting that job growth sustains consumer demand and that inflation, while elevated, will not choke off holiday purchases. If either of those assumptions fails, the optimism may prove fragile.
“shoppers may tolerate higher prices”
The shoppers in the “Have” category may indeed have a jolly holiday.
The shoppers in the “Have less” may lean into less discretionary… focus on family meals, traditional decorations, community events. If they themselves work in retail, maybe the employee discount helps them more.
Retailers could spread good will to all… sponsor a town ice rink, a booth at a city market… be in the community, not just a big box.