Phocas Analyzes Distribution Trends in New Report
Distributors cite economic uncertainty as the most impactful challenge they are facing, following closely by competition, according to the 2026 Inventory Trends in Wholesale Distribution Report.
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| Phocas released its 2026 Inventory Trends in Wholesale Distribution Report. |
Derived from a global survey of over 100 wholesale distributors, released by Phocas. a business and financial planning analysis platform for distributors, highlights current strategies being used to cope with a rapidly evolving trading environment.
One of the most visible findings from the survey is that distributors are reacting to greater competition and economic volatility by holding more stock.
The move is largely driven by the need to retain customers.
This trend shows a re-evaluation of traditional inventory management systems in response to tariffs and supply chain delays.
Per the report, 70% of respondents manage more than 5,000 SKUs and work with more than 50 suppliers. In addition, 39% of smaller distributors manage inventories up to 50,000 SKUs with less than 50 employees.
In value terms, 55% hold between $10M–$100M of stock and 16% turn over more than $100M annually.
A tactical way to optimize cash flow, enhance supplier relationships and steer sustainable growth, inventory management is now a core strategic lever across the industry.
“Inventory management can be siloed in a distribution company,” said Myles Glashier, CEO and co-founder of Phocas. “To do it well, the purchasing team needs to work closely with sales and finance so they can move with the market,”
The challenge is ensuring the right mix and depth of stock, as managing thousands of SKUs requires a level of analytical discipline that many distributors are still developing. Market conditions require a more flexible approach to inventory management.
The survey results show how wholesale distributors are planning to manage inventory over the next two years, building resilience and precision into the way stock is analyzed and replenished.
Just over half of respondents, 54%, said they expect to adopt a new demand forecasting approach, suggesting many distributors recognize that they need a way to get ahead of volatile buying patterns.
In addition, many distributors, 45%, are also expecting to increase automation.
Another trend is the move to more segmented inventory strategies. Neary one-third of respondents indicated an intent to introduce product and customer segmentation, signaling a shift away from one-size-fits-all replenishment.
In response to the continued uncertain supply reliability, 31% expect to adjust safety stock levels and 29% plan to diversify or expand their supplier base.
Overall, the results signify moves toward more data-driven, responsive inventory management, where forecasting, automation and segmentation protect service levels in a complex market.
“Demand planning is a core need for distributors, yet the industry faces an accuracy gap due to limited access to the right data,” Glashier said. “Distributors that can keep planning up to date with current sales are lowering the cost of inventory and improving service levels.”
He emphasized the importance of collaborative inventory management.
“Our latest report is designed to empower distributors by sharing insight from the industry on current conditions,” Glashier said. “With over 20 years of experience serving wholesale distributors, our commitment remains steadfast in providing clarity amidst industry changes. We aim to give distributors practical benchmarks, so they can compare their own operations and identify opportunities for improvement.
Get the full 2026 Inventory Trends in Wholesale Distribution Report, available for immediate download here.
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