Issue #77: What Did Retail Look Like in 2025?

It is that time of year again - predictions season! Last year, I wrote Retail wRapped 2024, which included both previewing the year as well as predictions for the following year. Now that I have a year with predictions under my belt, and already recapped in Issue #75, I wanted to focus on evaluating my 2025 predictions and sharing my crystal ball for next year.

This issue will focus on the recap of my predictions, and next week (in 2026!!!), I will share my predictions for the coming year. I really enjoyed putting this list together over the past couple of months and hope this is helpful for you, too! As always, I love to hear from readers! Please share any predictions, thoughts, or anecdotes regarding retail!

2025 Trends Recap

Part one of my predictions focused on trends. Overall, I think I did a solid job, and the ones that were wrong might just have been a little too early.

Trend 1: Grocery Gets a Revamp 🟢

This year was a huge year for the grocery industry. We saw everything from incumbents like Amazon expanding into the Whole Foods footprint to new grocers like Meadow Lane opening up in NYC with lines around the block. Plus, existing scale-ups like Erewhon continued to expand, and even announced its first foothold on the East Coast, opening a smoothie bar in Kith’s new membership club. There were a lot of struggles, but these success stories are just the beginning, in my opinion. If 2025 was the revamp, then 2026 is the takeoff. More to come, but all these trends have shown me that food and groceries will continue to play a more important role in people’s lives, as retail grocery becomes even more of a status symbol than it currently is.

Trend 2: More Spaces To Be Together 🔜

Humans are inherently social creatures, and given how the world has shifted to be less together in person, I felt strongly that it would shift back to being more focused on in-person connections. On the work front, that definitely was the case in some cities. For instance, in NYC, co-working locations grew after a slight contraction in 2024, and office vacancies hit a new five-year low. In SF, the AI startup wave has helped boost in-office attendance. However, outside of these cities, many others are struggling, like Houston, Dallas, DC, and Chicago. On the playing front, there was definitely some development, but no major headlines. On the living front, there was not much development on specific housing to foster connections, like co-living, but many cities did see conversations about housing supply. Finally, on the eating and drinking front, there were no major developments either. As I said in the last issue, and still agree now, “Fundamentally, people are isolated and want to be brought together.“ That hasn’t changed. Curious what everyone else is seeing in this space?

Trend 3: Better Pricing of Clean Label Ingredients 🥇

I certainly smashed it out of the park with this one. In my framework, I separate out clean labels and better-for-you, where better-for-you products on the surface are healthier than what they are replacing, but in reality contain different chemicals or additives that reduce the health benefits. Clean label is simple ingredients with minimal, chemical-free, high-quality ingredients. Consumers definitely caught on, and retailers, through their private label efforts, were very ahead of the game in ensuring they had better prices on these products.

Here are some of my favorite examples of the growth of better-priced clean-label products:

• PepsiCo Launches NKD Doritos and Cheetos - Free of Artificial Colors and Dyes

• Walmart Hits Half a Billion In Better Goods Sales

• Target Expands Good and Gather Brand With Additional Partnerships

• Glen Powell Partners With Walmart to Launch Smash Kitchen - A Better-For-You Condiment Brand At Affordable Prices

• Haribo Replaces Artificial Dyes with Plants

Credit to the retailers for leveraging private label avenues to make the products cheaper and react faster than the CPGs could. However, CPGs also do not want to be left behind, so they are focusing on creating better-priced clean-label products too. I expect this trend to continue in 2026 as well, albeit more on the CPG side than the retail side.

Trend 4: The Great Returns Reckoning of 2025 🟢

When it comes to returns, I clearly identified the problem, but somewhat underestimated the company’s resistance to doing anything about it. Last year, the National Retail Federation published a fascinating study on returns that estimated shoppers were projected to return $890B worth of merchandise in 2024, which amounts to 16.9% of retailers’ annual sales. So far, returns for 2025 are pacing closer to $850B worth of merchandise, but I did see Black Friday returns were up 12% YoY, so there is time for that to change. Part of the dip, however, can be attributed that companies are getting stricter around returns. According to Loop, which helps retailers with returns, the following measures have been implemented:

• 6% more brands are charging for returns than last year

• 2026 is the fourth consecutive year that the number of companies charging for returns has increased

• Upsells are up 17% as brands are trying to switch returns to exchanges

Still, many companies are taking the profitability hit, as these increases are pretty minimal relative to the massive profitability sink that returns are (maybe just the cost of doing business?). I expect this number of retailers charging for returns/upselling/doing whatever they can to reduce the cost to continue to climb.

Trend 5: Restaurants as Advertising Platform 🔴

Unfortunately, restaurant profits are still shrinking, but they have not turned to selling ads on their menu to boost profitability. Can’t win them all!

2025 Retailer Recap

In addition to putting out five trends I was expecting to see blossom in 2026, I also listed out 10 retailers, five I expected to do well and five I expected to struggle. Unsurprisingly, it is easier to pick retailers that are going to struggle than those that are going to succeed. Let’s see how I did:

I Predicted Strong 2025:

• Lululemon 🔴 - Stock down 44% YTD, and the CEO has just been replaced

• Binstar 🔴 - Closed all locations, seemingly out of the blue

• PopUp Bagels 🥇 - Announced franchise agreements to open up 300 locations across the country! 

• THISBOWL 🟢 - Opening up third location in NYC

• Starbucks 🟡 - Stock is down 8% YTD, and Brian Niccols is trying to make changes, but it may be too little too late

I Predicted A Weak 2025:

• Orange Theory 🟢 - More franchisees are running into issues

• Macy’s 🟢 - Planning on closing more stores, but stock is up 36% YTD

• Nike 🟢 - Stock is down 17% YTD as the new CEO tries to turn it around, also feels like it may be too little too late

• Whole Foods 🟢 - The store is totally transforming its value proposition, it could work out, but the customer base is DEFINITELY going to shift

• Kohl’s 🟢 - Stock price up 54% YTD, but had to close many locations

• Summary: Wrap City is a salads, wraps, and sandwiches fast casual restaurant that fuses those formats with international flavors. The original concept has grown via franchising and now sells the popular potato chips that accompany its sandwiches in-store at grocery stores.

• My Take: I have been fascinated with the bowl/wrap space, and I think this type of concept is an adjacent, but powerful one. With Subway’s struggles, despite a potential softness in demand, there will definitely be an opportunity for a sandwich shop, ideally one that has a strong bowl and salad menu too!

• Founder(s): Peter Akerman and Gregg Ryan

• Funding: Unknown

• Number of Locations: 15 Locations (MA, NH, and Ohio)

• Social Media Following: 1.2k on Instagram

Additional Links:

1. Shopify rolls out a native feature competing directly with Canal and Rye to add other stores’ products to your store (read more here)

2. Mill announces partnership with Whole Foods, the launch of its commercial composter, and an investment from Amazon (read more here)

3. TikTok Shop is now one of the top eCommerce sites (read more here)

4. Lidl is now open in NYC (read more here)

5. Barnes & Noble Plans to IPO and Open 60 Stores in 2026 (read more here)

6. DoorDash and Uber plan to sue NYC over a new potential law regarding tips (read more here)

7. Saks Global is exploring all future paths, including a potential bankruptcy (read more here)

8. Deal to sell off 120 J.C. Penny stores falls through (read more here)

9. Target is focusing on including quality in value conversation, not just price (read more here)

10. Lululemon to open six new international markets in 2026 (read more here)

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