In our ongoing blog series, RSM’s senior industry analysts explore back-to-school shopping trends and the impact on consumer businesses.
Consumers are purchasing back-to-school items earlier than normal this year in order to capitalize on pre-tariff prices and take advantage of marquee sales from large retailers. Evidence of this is a trend of inventory buildup to address demand, according to Bloomberg.
Between May and June, there was a noticeable increase in import volumes—measured by tonnage—within the footwear and apparel categories, indicating a ramp-up in inventory replenishment activity. This upward trend continued into July, suggesting a sustained purchasing cycle potentially driven by anticipated seasonal demand.
This early surge in imports likely reflected a strategic pull-forward of inventory in preparation for the back-to-school shopping season, which appeared to be occurring earlier than in previous years. While this approach helped retailers meet consumer demand promptly, it also introduced the risk of excess inventory accumulation. If actual consumer spending does not align with these advanced stocking levels, retailers may face challenges such as elevated holding costs, potential markdowns and margin pressure.
Following an initial increase in inventory purchasing activity observed in January 2025, inventory levels across the consumer goods sector have remained relatively stable throughout the year. This consistency suggests a deliberate effort by retailers and suppliers to maintain balanced stock levels in alignment with expected demand.
However, if purchasing activity continues at a steady pace without a corresponding acceleration in sales or inventory drawdown, there is a growing risk of inventory accumulation heading into the fall months.
A declining inventory-to-sales ratio indicates that retailers are maintaining lower inventory levels relative to their sales volumes. This trend typically reflects improved operational efficiency, as businesses are managing inventory more tightly and reducing the amount of capital tied up in unsold goods. As a result, companies will benefit from enhanced cash flow and more agile supply chain operations.
However, if sales begin to slow while inventory levels remain elevated or continue to rise, the dynamic shifts. Companies may face margin compression due to the need for markdowns or promotional pricing to clear excess stock. This can also strain liquidity, especially if inventory becomes stagnant and ties up working capital.
Additionally, external factors such as the early pull-forward of back-to-school spending, uncertainty surrounding tariffs, or fluctuations in interest rates could dampen consumer demand. In such scenarios, elevated inventory levels may become a liability, prompting retailers to initiate discounting strategies or promotional campaigns to mitigate the financial impact and rebalance inventory levels heading into the next sales cycle.
Key takeaways
Back-to-school shopping is occurring earlier than in previous years, driven by consumers seeking to take advantage of pre-tariff pricing and major retail promotions. The shortened shopping window places pressure on manufacturers and retailers to better understand and respond to market dynamics.
Inventory levels across the consumer goods sector have remained stable in 2025, reflecting efforts to align stock with expected demand. However, continued purchasing without a corresponding rise in sales could lead to inventory buildup heading into the fall, increasing the risk of overstock and future promotions to relieve excess inventory.
Check out our previous Back-to-school outlook: Tariffs’ influence on consumer behavior.
