Episode summary
Retailers Need to Diversify Merchandise Mix in 2026, Says Dana Telsey
Bloomberg Surveillance
· · 6 min · Guests: Dana Telsey
Summary
Holiday retail sales improved into Christmas, with Dana Telsey saying increases ran from about 3.5% to just over 4% after a lull between Black Friday and Christmas. She argued that the pickup was driven by consumers buying apparel and other goods they had delayed, helped by more occasions and events that pulled people out in colder weather.
Looking ahead to 2026, Telsey said the key retail themes are assortment and advertising, with merchandise mixes needing to change as retailers compete for attention through influencers, partnerships and collaborations. She said companies are increasingly focused on capturing new and younger customers, and she pointed to Burberry as an example of a brand benefiting from a return to heritage outerwear and accessories.
Telsey also described a mixed consumer backdrop that fits a K-shaped economy. She said Walmart is gaining strength as shoppers trade down, while retailers such as TJX, Gap, Urban Outfitters and Victoria’s Secret are interesting because they are reinventing themselves. She added that e-commerce is still growing faster than physical retail, but physical stores remain the bulk of sales and are seeing more investment in experiences, relocations and new flagships.
Key takeaways
- Dana Telsey said holiday retail sales rose roughly 3.5% to just over 4%, with spending picking up after Black Friday as shoppers bought delayed apparel purchases.
- Telsey expects 2026 retailers to rethink assortment and advertising, using influencers, partnerships and collaborations to win attention and younger customers.
- She said Burberry’s strength in outerwear and accessories shows the value of returning to heritage products and iconic merchandise.
- Telsey sees Walmart as a winner from trade-down behavior, while TJX, Gap, Urban Outfitters and Victoria’s Secret stand out as reinvention stories.
- She said e-commerce is growing faster than physical retail, but stores still drive 70% to 80% of total sales and continue to attract reinvestment.
Notable quotes
“We've seen the increases anywhere from three and a half to just over 4%. There was the lull, as usual, from Black Friday to Christmas”
“My line is assortment and advertising drive appreciation. I think the merchandise mix has got to be different, whether it's influencers, partnerships, collaborations”
“what are the new metrics that companies are talking about on a quarterly basis is how many new customers they captured”
“Burberry's results today for the holiday season were pretty good and the strength of outerwear continued into accessories like handbags because they went to what's iconic for them in heritage with outerwear”
“E-commerce is growing faster than physical retail, but it's off a smaller base. Physical retail is at least 70 to 80% of total sales really”
How the episode opens
We've seen the increases anywhere from three and a half to just over 4%. There was the lull, as usual, from Black Friday to Christmas. Then it picked up and you know what drove it?
The fact that a lot of the particularly on the apparel side, goods that people had and thought before they were buying along with, they were going out. So it wasn't just as casuals can get because people went to occasions and events. What are we looking for for 20, 26?
What are some of the themes, the trends you're looking for in your. My line is assortment and advertising drive appreciation. I think the merchandise mix has got to be different, whether it's influencers, partnerships, collaborations, How are you going to capture people's attention then?
Will drive stuff? Are the retailers, are they savvy about, you know, all the influencers that Tom, you know, favors on social media? I mean, do they know how to engage with those people?
Are you man the man repeller started? Exactly. You bet they do.
I mean, what are the new metrics that companies are talking about on a quarterly basis is how many new customers they captured. And everyone wants younger customers. Today we just saw it.
Look at Burberry. Burberry's results today for the holiday season were pretty good and the strength of outerwear continued into accessories like handbags because they went to what's iconic for them in heritage with outerwear. And now they've expanded it and oh, come on, they went back to basics.
Mrs. King is rocking the kids everything. And don't forget the gabardine.
Also, whatever it is they're doing it, folks, Will Dana, Chelsea wear this and this is a joy to have her here picking up the pieces on retails. Paul mentioned the bankruptcy is Saks Fifth Avenue is riveted.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- holiday retail sales
- luxury rebound
- gen z demand
- greater china luxury
- retailer merchandise mix
Companies and tickers mentioned
- Burberry Group plc
- Michael Kors
- Coach
- Telsey Advisory Group
Watch the episode
Watch “Retailers Need to Diversify Merchandise Mix in 2026, Says Dana Telsey” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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