Faced with economic uncertainty and increasing competition, wholesale distributors are planning significant shifts in their inventory strategies for 2026, according to Phocas Software’s first annual 2026 Inventory Trends in Wholesale Distribution report.
The report, which surveyed over 100 global distribution professionals, shows that 54% expect to adopt a new demand forecasting approach in 2026. This signals a move toward more precise, data-driven inventory management.
Additionally, 45% of distributors plan to increase data and warehouse automation, while a third intend to introduce more product and customer segmentation. Thirty-one percent expect to adjust their safety stock levels.
These strategic adjustments are a direct response to a market where distributors cite economic uncertainty as their most impactful challenge, followed closely by greater competition.
“Demand planning is a core need for distributors, yet the industry faces an accuracy gap due to limited access to the right data,” said Phocas CEO Myles Glashier in a news release emailed to FreightWaves. “Distributors that can keep planning up-to-date with current sales are lowering the cost of inventory and improving service levels.”
Seventy percent of distributors surveyed manage more than 5,000 SKUs, and many work with over 50 suppliers. The minority of distributors who report having a “very accurate” demand planning process see significant benefits including reduced inventory costs, improved service levels, increased revenue and better terms with suppliers.
Inventory buildup
The report also identified a key trend where distributors are prioritizing stock availability over cash efficiency, often holding more inventory to avoid losing sales. The report found that 63% of respondents believe they lose sales because they don’t have the right stock available.
This strategy of building up inventory to buffer against market volatility was also observed last year. In August, FreightWaves analyzed data showing that importers began holding more inventory in the first half of 2025 to mitigate disruptions from tariff threats.
This resulted in a 4% year-over-year increase in average on-hand inventory levels across their facilities as shippers consolidated shipments to optimize freight costs.
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