Dive Brief:

• Inventory pile-ups on many retail shelves could make promotional prices inevitable, according to reporting by the Wall Street Journal. Inventory is up at department stores and “across retail,” according to a Cowen and Co. report Tuesday.

• Macy’s and Kohl’s this week reported muted Q3 results, and brands like Michael Kors and Ralph Lauren say department stores have backlogs of their goods. But specialty stores like Lululemon and sports gear retailers like Nike and Under Armour are also reporting inventory gluts. Lululemon’s inventory, for example, rose 55% last quarter, compared with a 16% sales increase, both year over year.

• Retailers have cited backlogs at West Coast ports as one of the causes of inventory buildup. But the strong dollar, which is keep foreign tourists away, and warm weather undermining sales of cold-weather gear are also contributing, according to the report.

Dive Insight:

The inventory build-up heading into the holiday retail season is evidence of how precarious a time the holiday season is for retailers. On paper, things should be good as the economy as rebounded fairly well at this point, gas prices have remained down long enough to save consumers real money, and unemployment is low.

But the other forces noted above could yet force retailers to slash prices in order to move goods out of their stores and warehouses.

In addition to all that, economists continue to cite wage stagnation as a factor in keeping consumers wary of spending. And the big discounts of recent holiday seasons are fresh in shoppers’ minds, many experts say, to the point where they’ll expect discounts again.

"The consumer has been permanently conditioned to expect significant discounts," according to PricewaterhouseCoopers’ U.S. retail and consumer Steven Barr. "Since the economic recovery has been sluggish and episodic, retailers can come to this season with strategies to not go promotional, but it only takes one or two to begin going promotional.”