US Retail Inventory Tracker, 4Q18: Potential Tariff Hike and Poor Holiday Sales Lead to Higher Inventories

Executive Summary

In this first of our quarterly US Retail Inventory Tracker reports we analyze inventory trends among our Coresight 100 US retailers.

• Most retailers increased inventory even as the holiday season ended, with looming tariff increases a major cause: Retailers pre-bought expecting higher future import tariffs on products from China.
• Apparel specialty retailers similarly piled up stock ahead of the potential tariff increase, such as specialty retailers Dick’s Sporting Goods and Burlington Stores.
• Department stores held inventory levels lower. Macy’s merchandise inventory was impacted by a fire, Kohl’s invested to optimize inventory, so the company was able to reduce stock and increase turnover.
• General-merchandise retailers, such as Walmart and Dollar General, also increased inventory ahead of tariff increases.
• Luxury retailer inventory levels increased due to planned investments in store expansion and assortment mix optimization.