0:00 spk_0
With companies pulling forward because of tariffs, our next guest says 2026 could get a little more expensive. Joining me now is Lauren Murphy, Wells Fargo retail finance managing director. Lauren, great to see you. So you’ve you’ve been tracking these inventories, Lauren, and as we head into the holidays, you see a 4% rise in in.On hand inventory, but then a sharp drop in inventory, inventory coming in. I, I guess the bottom line all this for, for viewers, Lauren, is they’re getting ready to do that shopping over the holidays. What do you expect to happen with pricing? I mean, does it, does it generally stay flat, go up, go down? Walk us through it. What, what would be your forecast?
0:40 spk_1
Yeah, Josh, thanks for having me. So as you mentioned, there we, we did see that pull forward of inventory in the beginning of the year, and I really think that bodes well for prices, right? Retailers did a really good job setting the stage, bringing that inventory in uh before the price increases. So that’s really gonna bode well for the consumer. So what we’re hearing from retailers.Is that they’re really trying to hold the line on the cost increases to get through holiday, meet their consumer where they’re at this holiday, but we do believe that there may be pricing pressures going into 26.
1:11 spk_0
Are there any sectors though, Lauren? I mean, generally, OK, pricing they hold the line. Any sectors or verticals where you might see them rise?
1:20 spk_1
Yeah, I would say post immediately. I think we’re seeing it in home, right? Furniture, home goods, etc. I think the price increases were just too fast, too rapid, that we’ve already seen that kind of trickle up in both the inventory levels that we’re seeing and also the prices that we’re seeing in that sector.
1:36 spk_0
If retailers are generally gonna hold pricing steady here, Lauren, what do we think that could mean broadly for margins?
1:44 spk_1
Yeah, I think right similar to the results that we’re seeing, I think it’s going to continue to be a mixed bag, and that’s something that I’m gonna continue to keep an eye on heading into getting post-holiday results because I do think the question’s going to be the sales trend that we’re trying to see through holiday, is that really going to come at the expense of margin.The cost increases, but also are retailers really going to need to chase that that sale and discount for heading into holiday to capture that, capture that consumer?
2:15 spk_0
BlackFriday, Cyber Monday coming up, Lauren, I’m just curious, have you tracked the space, how those events sort of evolved over time?
2:23 spk_1
Yeah, like I’ve been in this space for 15 years and it used to be retailers lived or die by those, you know, that 4 day period. I’m now seeing it stretch out to we’re really tracking what the total sales are across the month, right? We saw sales for the holiday start as beginning as early as October.And I do think although the, you know, Black Friday, Cyber Monday are going to continue to be marquee events, right, that’s where we’re going to see a lot of customer demand. There could potentially even be further demand post post those holidays heading into Christmas because if retailers aren’t seeing the sales that they need to this upcoming weekend, right, that’s going to bode well for the consumer and they’re going to see deeper discounts heading into Christmas.
3:01 spk_0
Speaking of the consumer, Lauren, any, any tips and tricks you might offer friends and family as they head into the holidays and get ready to do that shopping?
3:09 spk_1
Yeah, listen, shop around. I think retailers are going to be really dynamic in their discounting strategies this year. We’re gonna see probably maybe broader markdowns or so a little bit more, um, capping what they capping markdowns on what we think are going to be higher selling items. So really, you gotta be, uh, diligent out there. Also, a good alternative this year could be a gift card, right? If your budget is a certain dollar amount.Everyone loves a gift card. It kind of puts the onus on the your recipient to go out there, get the best deal they can find in the item that they want.
3:39 spk_0
Final question, as you sort of heard from these retailers, it was Walmart and Layoy and Target, you know, you saw the results, you listened to conference calls. Did it generally sort of align with your views of where the sector’s at and where it’s headed?
3:53 spk_1
Yeah, I think, you know what we’re hearing is everyone wishes they had a magic ball heading into this holiday. I think we’re going to continue to see a mixed bag. I think it’s gonna be a little bit more of digging into the story, right? We’re all bracing for a little bit more of those cost increases to start impacting P&Ls and something we’re gonna be watching very closely post holiday.