Earnings season produced the usual chorus of operators describing inventory as "healthy" and "well-positioned." When you actually line up the disclosures and look at turn velocity year over year, the picture is more uneven than the commentary. A small group of retailers has genuinely improved. A much larger group has stabilized at post-pandemic levels that are still meaningfully worse than 2019. And a handful are quietly slipping in a way the headline numbers obscure.

This piece walks through the patterns. We are not naming specific companies in connection with specific figures — partly because the disclosures are uneven enough that direct comparisons are unfair, and partly because the more useful conversation is about what the leaders are doing differently. Sourcing and supply chain leaders we have spoken with over the past quarter have been remarkably consistent on what those differences are.

Where the genuine improvement is concentrated

Three categories stand out as having materially improved turn velocity versus their 2023 troughs:

Off-price and discount. This is the least surprising of the three. The off-price model is structurally built around buying close-in and turning fast, and the channel has had a steady supply of distressed inventory from full-price retailers to feed on for the better part of three years. Several off-price operators are now running turns at or above their pre-pandemic baselines.

Hard discount grocery. The European hard discounters have continued to widen the gap on turn velocity versus mainstream supermarket operators. The drivers are not new — narrow assortments, high private-label penetration, ruthless SKU rationalization — but the gap has widened in the post-pandemic period rather than narrowed, which is notable given how much investment mainstream grocery has put into supply chain modernization.

A specific cohort of specialty apparel. The brands that genuinely cut their assortments during 2023 and 2024 — and held the line on the cuts — are now showing turn improvements that the brands which restored their assortment breadth are not. A planning director at one such brand described their internal mantra as "fewer SKUs, deeper buys, faster reorders." It is not a sophisticated insight. The discipline of actually executing on it is the rare part.

Where the stabilization is hiding underperformance

A broader middle of the market — mid-tier department stores, mainstream apparel, large-format general merchandise — is reporting turn metrics that look stable year over year. The stability itself is the issue. Most of these operators came into 2024 with turn velocities that were 10 to 20 percent below their 2019 baselines, and "stable" means they have held at that lower level rather than recovered.

Several supply chain leaders we spoke to in this segment acknowledged the gap and pointed to the same set of causes: longer lead times from the Red Sea reroute, higher safety stock targets to absorb that variance, and assortment breadth that has crept back up after the 2023 cuts. None of these are surprises. The collective effect is that the working capital sitting in inventory for these operators is structurally higher than it was, and the return on invested capital math is suffering accordingly.

The quiet slippage

The most interesting cases — and the ones least visible in headline reporting — are the operators whose turn metrics look stable or modestly improved on a reported basis but are actually being held up by mix shifts. A retailer that has grown its grocery or consumables share relative to general merchandise will show better blended turns even if the general merchandise side has gotten slower. Several of the largest US general merchandise operators fit this pattern. The blended numbers are fine. The category-level numbers, where they are disclosed, are not.

This is worth watching because it has implications for how operators allocate capital to supply chain investments. If the blended metric is improving but the underlying general merchandise turn is slipping, the temptation to declare the supply chain modernization complete is high, and the case for further investment is harder to make internally.

What the leaders are doing differently

Across conversations with operators whose turn velocity has actually improved, the same handful of practices come up repeatedly:

• SKU rationalization that holds. Cuts made in 2023 that were then quietly restored in 2024 and 2025 are common. Cuts that were kept are rare and correlate with the improved-turn cohort.
• Demand sensing that drives replenishment, not just forecasting. Several leaders described moving from weekly to daily replenishment signal at the DC level for high-velocity categories.
• A willingness to take stockouts. This is the cultural shift that the rest follows from. Operators who have improved turns have explicitly told their merchant teams that some stockouts are acceptable. Operators who have not improved are still implicitly penalizing stockouts more than they penalize overstock.
• Vendor-managed inventory programs that actually work. VMI has been talked about for twenty years. The operators getting value from it now are the ones who have invested in the data integration to make it real, not just the contractual language.

None of this is novel. What is striking, talking to operators across the market, is how few organizations are executing on all four. The companies showing real turn improvement in 2026 are the ones that are. Everyone else is reporting "stable" and hoping the comparison gets easier next year.