Beyond the $1 Trillion Holiday: What Retail Supply Chain Leaders Must Do Next

The National Retail Federation (NRF) projects that U.S. holiday sales will surpass $1 trillion for the first time in 2025, a milestone that underscores consumers’ continuing appetite for spending. Yet beneath the record headline lies a more complex truth: year-over-year growth is slowing (expected to be 3.7–4.2%, down from 3.9 – 4.7%), freight and labor costs remain elevated, and margins are tight. Additionally, time will tell if the consumer impacts from the U.S. government shutdown will have lasting effects that put the brakes on the race to $1 Trillion in Holiday spending. 

For retail supply chain leaders, the real challenge is more than just managing the projected record season. It’s about deciding what to do next. As the holiday decorations are packed away for another year, forward-thinking organizations will use the coming months to transform learnings from the 2025 peak into a competitive advantage for 2026 and beyond. 

Diagnose Before Celebrating 

Every record season leaves behind a data trail which is the roadmap for improvement. Q1 should begin with a structured post-season hindsight across four competencies: 

• • Demand accuracy: Where did forecasts over- or under-perform actuals? Identify data outliers from events, promos, and marketplace activities. 
  • Operational execution: Which Stores, DCs, fulfillment channels, or partners became bottlenecks, and why? 
  • Margin leakage: Where did promotional activity, expedited freight, markdowns, or overtime costs, erode profit? 
  • Customer experience: Which store or sales channels drove repeat purchases or complaints? 

The NRF’s data shows consumers starting holiday shopping earlier than ever to better spread expenditures out over time, but almost two-thirds still plan to wait until Thanksgiving weekend for most of their shopping. Turning those insights into predictive models will sharpen 2026 planning. A well-run post-mortem is more than just reporting, it’s the foundation for next year’s agility. 

Rebalance Inventory for a Normalized Q1 

While imports surged in the early part of 2025 due to impending tariff concerns, NRF’s Port Tracker reports that volumes in November and December are forecasted to be down 17-19% year over year as retailers hit full stock levels earlier than normal. Leaders should enter Q1 with a plan to rebalance inventory, not just clear it. Key priorities: 

• • Accelerate markdowns on slow movers before they impact working capital. 
  • Re-align open purchase orders for spring and summer based on updated demand signals. 
  • Explore network-wide visibility tools that track inventory across channels in real time. 

The goal is more than just leaner inventory; it’s more responsive inventory. A new year “overstock hangover” can quickly turn a strong holiday into a weak Q1 if inventory strategy lags consumer reality. 

Reinforce Supplier and Logistics Relationships While Capacity Is Available 

With the holiday rush behind us, freight and carrier markets will loosen temporarily. That’s the moment to renegotiate when possible. Maersk’s November Update warned that tariffs and cross-border freight costs continue to squeeze retailers. By acting early in 2026, procurement and logistics leaders can lock in favorable rates, diversify suppliers, and strengthen redundancy before the next seasonal surge. 

Priorities for Q1 negotiations: 

• • Evaluate 3PL and carrier performance using data from peak season to renew the strong and replace the weak. 
  • Add dual sourcing and multi-port options to hedge against geopolitical and tariff shocks. 
  • Build service-level transparency into contracts to manage disruption proactively. 

Strategically, this is the quarter to turn short-term vendor coordination into long-term network resilience. 

 

Address Labor Gaps Through Technology and Retention 

NRF reports that seasonal hiring is projected to fall sharply in 2025, to about 265,000–365,000 temporary workers, down from 442,000 last year. Many retail chains, DCs and last-mile providers will be challenged to operate at or below seasonal capacity. 

Q1 is the time to redesign the labor model before next year’s scramble: 

• • Consider automation and robotics where throughput is consistently constrained. 
  • Retain high-performing seasonal workers through training programs and early re-contracts. 
  • Increase use of workforce analytics to predict peak labor needs and cross-train for flexibility. 

Automation is more than just an efficiency play, think of it as capacity insurance in a tight labor market. 

Institutionalize Resilience: Build for the Next Shock 

Every record year exposes vulnerabilities. Whether it’s labor shortages, freight volatility, or inconsistent supplier performance, the best organizations use Q1 to institutionalize what they learned. 

Supply chain leaders should: 

• • Update risk maps and continuity plans based on this season’s bottlenecks. 
  • Run scenario simulations for alternate demand curves, port disruptions, and supplier failures. 
  • Explore AI-driven early-warning systems that flag deviations in real time. 

Resilience is a pro-active posture; it’s a structured set of capabilities built when the pressure eases for when the pressure rises. 

From Record to Readiness 

If the NRF projections hold, crossing the $1 trillion threshold will prove that U.S. retail demand is remarkably resilient. But the more important story is what leaders do after the celebration. Q1-Q2 2026 is the reset window—when organizations turn holiday strain into strategic clarity. 

Those who act early; drilling into the data, optimizing inventory, rebuilding partnerships, and embedding resilience, will enter the next peak not just stronger, but smarter. Because in modern retail, the real competitive edge isn’t surviving the season. It’s turning the season’s learning into an actionable strategy for the next holiday season.  

If you would like to discuss how your organization can get more proactive and prepare for the post-holiday recovery as well as lay out the strategy and initiatives to tackle 2026 and beyond, please reach out for an initial exploratory discussion. 

 

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