Issue #78: What Will Retail Look Like in 2026?

Happy New Year! I hope everyone had a great time celebrating with family and friends or laying low and is feeling recharged to hit the ground running in 2026.

Last week, in case you missed it, in Issue #77, I broke down my 2025 predictions - what I got right and what I missed on. Some hit and some missed, but I really enjoyed the look back. Now, let’s dive into the retail 2026 preview with my five seven trend predictions and five retailers to watch!

2026 Trend Predictions:

Prediction #1: Hydration and Fiber On The Rise

Move over protein, there are new players in the health and wellness wave: Hydration and Fiber. These two attributes definitely saw an uptick towards the end of 2025, but I think they will continue to rise, alongside protein, which will start to plateau. Let’s dive into the data:

• Fiber: According to the USDA, Adult Americans ONLY average 58% of the required fiber needed. This deficiency is partially due to the fact that many of the ready-to-eat processed foods that Americans consume are made from refined grains stripped of fiber, such as white rice and white flour. There are many fiber supplements out there, but also beans, lentils, peas, whole wheat, quinoa, and chickpeas, all naturally have high fiber.

• Hydration: Similar to Fiber, Americans are not drinking enough water. According to one study, about 86% are not drinking enough water (less than 7 glasses per day).

Now that people are starting to understand these deficiencies, it is leading to action. Here is the Google Trends change over the last five years:

For brands and retailers looking to capitalize, a lot depends on the type of retailer you are. If you sell these types of products, definitely make sure that you have the right assortment that fits those needs. There is also very much a seasonal demand, especially for hydration. For any retailer, regardless of what you sell, you can always evaluate your water strategy, do you have water for your customers?

Prediction #2: On-The-Go Breakfast And All-Day Beverage

Office occupancy is back on the rise, and people are spending more time on the go. To fit those occasions, people need quick, on-the-go breakfasts as well as beverages to fuel their day. Beverages beyond just the traditional coffee. Simultaneously, many customers are looking for value (time is part of that value equation), while also trying to stay health-conscious (protein, hydration, fiber), as discussed in Trend #1. All of that to say, I think this year we will see the rise of these all-day breakfast spots that serve beverages beyond coffee and little snacks. Starbucks has shifted its menu to cater to this assortment and is continuing to evolve in that space. McDonald’s is bringing CosMc’s into its stores. Chik-fil-A is launching Daybright, which I think will end up following the CosMc’s path, being folded into the main restaurant. On the more startup side, I see Bluestone Lane, Maman, Pura Vida Cafe, and others to continue to grow in the space.

Curious - what is everyone’s favorite all-day beverage/ breakfast / snack spot?

Prediction #3: The Rise Of Autonomous Cars & Trucks

For a long time now, Autonomous/Self-Driving Cars, have been something that I have been thinking about. What is the need to no longer drive going to do to society? How are cars going to look differently? While this has been in the back of my mind for a while, the rise of Waymo (owned by Google’s parent company Alphabet) has accelerated those thoughts. For those unaware, Waymo has developed a self-driving car that is not available for purchase but instead operates as a rideshare service, like Uber or Lyft. Their services have been popular with consumers, as illustrated by the market share below.

In May 2023, Waymo was doing just 10,000 commercial public rides per week, as of December, the weekly number of rides has now shot up to 450,000 per week. Waymo is also able to do this super efficiently, with the small zone of San Francisco being covered by only 1,000 cars. Waymo expansion is on the horizon, with more cities being opened up shortly, including some in the Northeast. Weather, plus the unpredictability of human drivers, will continue to be the biggest obstacles going forward, but these are both solvable issues with more rides under the belt.

Assuming both of these are solved shortly, it will fundamentally shift the paradigm of commerce. Transporting goods via truck will be much easier and quicker, especially with the combination of battery life growth and a universal battery that can just be swapped in and out. Goods will be cheaper, and some people may lose/shift jobs, and many lives will be saved. I don’t have all the answers, but I strongly believe this shift is something retailers need to be preparing for. What are you going to do with all your extra parking space?

Here are some things I can see changing:

• Parking spaces will be reduced, and redevelopment

• Car ownership will plummet, and there will be additional funds available that previously went to cars

• eCommerce penetration will continue to rise, but shift more towards delivery rather than shipping (local fulfillment)

• Less distribution center infrastructure will be needed, and more direct to store deliveries

• A rise in dark stores and more on-route commerce

• Disappearance of speeding tickets (and the associated revenue) and shifting speed limits

This prediction may be a little early, but I am confident that this will have the most profound impact of anything on this list.

Prediction #4: C-Stores Growing Assortment

This year, I spent a lot of time in the C-Store/Bodega space, diving into the product assortment in Issue #56 and how certain stores are really getting an upgrade in Issue #62. I expect this shift to continue in 2026, where these types of stores, plus gas stations, will continue to lean into hot food and limited grocery staples to grow their business. At the end of the day, customers are showing a willingness to buy more items in more places, while wanting things to also be very convenient. These trends really lend themselves to these types of establishments. Especially with what was talked about in Trends #2 and #3, there needs to be a restructuring, or many of these companies will be left behind. It will be startups, like Maggie’s Refuel, combined with incumbents, like RaceTrac, who purchased Potbelly this year, who transform these once static locations into much more dynamic, ready to handle the future of driverless car companies.

Prediction #5: Retail AI Continues To Grow Albeit With Fierce Competition

Another area I spent more time in this year was AI software, in particular, its application to the retail industry. What is really exciting about retail is that there is so much messy, unstructured data - truly vast amounts of it. When it comes to AI, solving these types of problems is one of the best use cases. Because of this use case supremacy, one of my favorite pieces I did this year was this market map on early-stage, NYC AI companies. In researching these companies, I learned so much and developed my thesis for the future. As part of my thesis, I would argue that aside from chatbots, retail AI software might be one of the best uses of current AI capabilities. However, along with that ability to utilize AI comes great competition. It takes a lot to build these products, but given the opportunity and technology at people’s fingertips, it is so competitive. Additionally, given how connected retail is, it is very difficult to build vertical software. Startups end up needing to build horizontally to solve the pain points for your customers, given the connectivity in retail. I still am very bullish on retail AI software, but I think this will be a huge year for these companies, as they set the foundation for who will be the winner for the next 5-10 years. In terms of differentiation, here is what I think the key winning ingredients are:

• First mover advantage

• Capital stack - not necessarily just being the one who raised the most, but also combining the amount raised with spending efficiency

• An elite product roadmap

• Solving painpoints that are needs to haves, not nice to haves

• Plus, most importantly, knowledge of the retail space will truly help differentiate the companies.

It will be very exciting to follow along in this space, especially. What factors did I miss?

Prediction #6: Major CPG Funding Opportunities

2025 was a banner year for CPG exits and M&A activity, levels that have not been seen in a long time. As a recap, here are some of the major startups in the CPG space that exited to large corporates:

• Unilever bought men’s personal care brand Dr. Squatch for $1.5B

• Hershey’s bought popcorn brand Lesser Evil (details here)

• Pepsi bought better-for-you chips brand Siete Foods for $1.2B and better-for-you soda Poppi for almost $2B

• Celsius bought the better-for-you energy drink Alani for $1.8B

• Anheuser-Busch bought a majority stake in BeatBox, a popular Gen Z RTD, for $490M

• Chobani acquired ready-to-eat meal maker Daily Harvest for an undisclosed amount

• Flowers Foods bought better-for-you snack brand Simple Mills for $795M

• Tito’s bought the tequila brand Lalo for an undisclosed amount

• Mammoth Brands, the owner of Harry’s, bought Coterie, a premium baby brand, for an undisclosed amount

In this list alone, which I wrote up rather quickly, that is over $8B in capital returning to investors. There are definitely some additional deals I missed, plus the flurry of M&A activity at the large conglomerate to large conglomerate (Ferrero buying Kellogg, etc.) means there is plenty of funds to be poured into the right CPG products. The level of capital in the space will likely harken back to the 2016-2020 time frame, when, after the Dollar Shave Club exit for $1B, CPG was seen as an early-stage VC investable business (still debatable here, especially at scale). However, I expect the standards to remain high to recieve investment. For a quick refresher, here is what I wrote about what a CPG brand needs to do in retail to get investment. In 2026, I am confident funding will increase given the additional capital, except I believe it will still be challenging to receive funding. For retailers, this should be exciting as well because it means brands will have more funds to spend on in-store marketing.

What brands do you think deserve funding?

Prediction #7: Restaurant As Status → Grocery/Home Cooking As Status

I am a huge foodie. I love cooking food and going to new (and old favorite) restaurants, as well as chatting about these subjects. A big part of that discourse is actually via an app. Since April 2022, I have been a power user of the social media app, Beli, where you share restaurants you have been to and want to visit with your friends. Even though what restaurants you have been to has always been a status symbol, Beli has further propelled this into the mainstream. In 2026, however, I see this evolving beyond restaurants to grocery and home cooking as well. I have been thinking about this for a while, but two statistics from the recent 2026 consumer trends report stood out to me:

• Most Americans believe being healthy and fit is one of today’s biggest status symbols

• Consumers are trading up (spending more) in wellness, health, lifestyle, and fresh fruits and veggies

To me, what this all adds up to is the evolution of food as a status. Restaurants will always play a role, but I think that, given the health goals, as well as people looking to save money, will lead to a home cooking glow up. In order to cook well, you need to shop for groceries well. Why would you be willing to spend more on health? Partly because it’s good for you, but also because others around you are doing it (status).

I strongly believe these tailwinds have been building for a while. On the CPG side, brands have been re-inventing the pantry to make people proud of what they use. Like what Graza did in the Olive Oil space, Heyday in the canned space, etc. Pantry staples are no longer to be hidden away. On the cooking side, people have been sharing their creations in texts and Instagram posts. Finally, on the grocery side, the rise of Erewhon and the opening of upstarts like Meadow Lane and Happier Grocery have shown the pah for food shopping to be more of a scene. Where all this culminates in terms of people talking about it, like Beli has done for restaurants, I am not sure. It could be disparate in many forms, like texts and other social media apps too. What I am sure, however, is that in 2026, where you buy your food, what brands you buy, and how you prepare that food will be EVEN MORE of a status symbol.

2026 Retailers To Watch Predictions:

In 2026, some retailers are going to thrive, and some are unfortunately going to fail, such is the retail world. I wanted to highlight some retailers I am excited for and explain why I think that. Here are my thoughts:

• PopUp Bagels - I have been writing about PopUp for a while and following them since they were very small. Over the years, the hype has ebbed and flowed, but the business remains strong, which is all the more encouraging. With the rapid expansion of stores and continued strength on social media, as well as with the advertising medium (cream cheeses and butter), I think it is poised to have a very successful 2026 and beyond.

• Barnes & Noble - 60 new stores? IPO on the horizon? Barnes & Noble has done what few have done, gone toe to toe with Amazon, failed, and come back stronger. I think the lesson for retailers is that B&N focused on the basics and the customer. That is a little simplification of the amazing turnaround, but as a retailer, that is the core to success. Will Amazon respond? How will B&N continue to grow? Regardless, very exciting to follow.

• Alo - Last year, I predicted Lululemon would have a strong year after turning its business around in Q3 and Q4 2024. I could not have been more wrong, but in reflecting on the opinion, I believe I just bet on the wrong horse. Athleisure and Athletic apparel are totally a blossoming business, but it seems like the incumbents are behind and the upstarts are leading. I really like what Alo has done from a product development, marketing, and merchandising standpoint, so they are my favorite in the space, but I would not be surprised if another startup, like Vuori, or an incumbent, like On, Nike, or Lululemon, takes a lead in the space.

• Swig - Oftentimes, when you hear of consumer behavior, it is described as either a Bell curve or a barbell. I disagree generally with both these assertions, as I think it is a messy mix of both the Bell curve and a barbell. People change their thinking a ton. Despite all I have said about the rise of health-conscious mentality, I also think that there is a segment of people who do not care about health that much, or sometimes want a little sweet treat. That is why I am bullish on Swig, which provides a sugary fix in the form of a dirty soda (soda with toppings and flavors). Currently at 124 locations, I think it has the opportunity to scale even further. For context, another sugary fix business, Crumbl, has almost 1,100 locations. Both businesses have their flaws, but I think they will be around for a while

• Toys-R-US - Similar to Barnes & Noble, I think Toys-R-Us will be the next retailer to return from the dead. I love what they are doing, tapping into the nostalgia and authority of the brand to build their own stores and open stores in other stores. People will always need to buy toys, and toys are also such an in-person purchase. In the past, Toys-R-US was too asset-heavy, had a horrible capital stack, and an eCommerce disaster, all of which led to the initial failings. However, through all that, the brand equity persisted and allowed them to re-adjust the strategy. Finally, I am super bullish on experiences, which Toys-R-Us will help deliver.

Additional Links:

1. Sauz, the tomato sauce CPG startup, just raised from a group of influencers (read more here)

2. Brian Niccol, the new Starbucks CEO, is encouraged by Reddit posts he saw as a signal that the new culture they are trying to implement is working (read more here)

3. Sprinkles Cupcakes shut down all company-owned locations (read more here)

4. Regional grocers decide how to chart forward (read more here)

5. What restaurant menu’s didn’t work in 2025? (read more here)

6. Now that Potbelly was purchased by c-store RaceTrac, it is focusing on growth (read more here)

7. Krispy Kreme is using asset sales to shave down its long-term debt (read more here)

8. Modern retail’s ins and outs of 2026 (read more here)

9. 7-Eleven CEO to step down (read more here)

10. Performance Food Group (PFG) names a new CEO (read more here)

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