Wholesale distributors are planning significant changes to inventory strategy in 2026 as uncertainty and competition reshape the market, according to Phocas Software’s first annual “2026 Inventory Trends in Wholesale Distribution” report.
Based on a survey of more than 100 distribution professionals worldwide, the report found 54% expect to adopt a new demand forecasting approach in 2026—signaling a shift toward more precise, data-driven inventory management. In parallel, 45% plan to increase data and warehouse automation, about a third intend to introduce more product and customer segmentation, and 31% expect to adjust safety stock levels.
These changes reflect an environment where respondents cite economic uncertainty as the most impactful challenge, followed closely by intensifying competition.
“Demand planning is a core need for distributors, yet the industry faces an accuracy gap due to limited access to the right data,” Phocas CEO Myles Glashier said. He added that distributors able to keep planning aligned with current sales can reduce inventory costs while improving service levels.
The report also highlights structural complexity: 70% of surveyed distributors manage more than 5,000 SKUs, and many work with more than 50 suppliers. Those who report a “very accurate” demand planning process see measurable benefits, including lower inventory costs, improved service levels, stronger revenue performance and better supplier terms.
Inventory buildup continues
A key trend identified is a tilt toward stock availability over cash efficiency. The report found 63% believe they lose sales because they do not have the right stock on hand. This defensive inventory posture mirrors patterns observed last year: in August, FreightWaves analysis noted importers increased inventories in the first half of 2025 amid tariff-related disruption risks, driving a 4% year-over-year increase in average on-hand inventory levels as shippers consolidated shipments to optimize freight costs.
