Tariffs to acutely hit inventory, availability in US retailers: BCG

Goods in the fashion and luxury and consumer durables categories face the highest exposure to inventory constraints, given their weighting toward China and countries like Vietnam and Cambodia, which are projected to be subject to incremental tariffs of 20 per cent or more as of August 2025—an economic headwind that could produce a dip of 5 to 7 percentage points in gross margin, BCG said in a recent report.

EMarketer has projected that total US retail sales will rise by only 1.2 per cent in November and December this year compared to 4.3 per cent in the same months last year, and it has lowered its forecast for holiday sales by anywhere from about $36 billion (2.5 per cent) to about $100 billion (7 per cent) due to tariffs.

Titled ‘How Retailers Can DeRisk the 2025 Holiday Shopping Season’, the BCG report said brands need full visibility in their inventory positions and on trade-offs between volume and margin to build successful holiday pricing, promotion and marketing plans.

US retailers should take an omni-channel approach to planning and marketing. They should also develop strategies to win the last mile and get holiday shoppers into the store, the report recommended. And these imperatives must take into consideration the power of artificial intelligence (AI) technologies.

Retailers can use a three-pronged approach to address these unique challenges: reshape the plan to demand, execute with excellence, and tune and scale with agility, the report added.

ALCHEMPro News Desk (DS)