My 2025 Retail Predictions – The Second Batch.

Since 2018 I have been sharing my annual predictions for retail’s future. And each year I take full account of how well I did or didn’t do (here’s the 2024 reckoning).

Last week I released the first six of my annual prognostications. Here are the remaining half-dozen, along with a few additional wild cards.

7. Department Stores Keep Running to Stand Still

The stall the mall has been epic, as just about every department store experienced market share declines in recent years. Even Kohl’s, which would seem to have a convenience advantage by having more locations and being situated in easier to access shopping centers “off the mall,” has seen sales plunge by more than 17% since 2019.

Various revitalization efforts are underway, most notably at Macy’s. Nordstrom has gone private, Saks and Neiman Marcus have merged, and new leadership is in place at Kohl’s. But much of this will epitomize what I call “the curse of the timid transformation.” Expect continued market share losses, paltry profits, and more rounds of store closings.

WILD CARD #3: Kohl’s becomes part of Catalyst Brands. Both capacity and costs need desperately need to come out of the moderate department store sector. Because Kohl’s and JC Penney have similar target customers and merchandise offering, a compelling case could be made for a merger that would rationalize hundreds of locations and consolidate brands and operations. Given that Catalyst Brands is new and Ashley Buchanan has just taken the helm at Kohl’s this might be a better 2026 prediction.

8. Big changes come to Target

There’s no nice way to say this: Walmart has been kicking Target’s a** for the past couple of years. While some of the relative share loss can be blamed on an unfavorable merchandise mix (too much discretionary, not enough grocery), it’s clear that Target has not focused enough on improving the store experience and has lost ground to Walmart innovation. Bolder action is needed.

Beyond aggressively stepping up its game on multiple fronts, I wouldn’t be surprised to see CEO Brian Cornell’s ouster, a pull-back on expansion plans, a reworking of its Ulta partnership, and maybe even a material round of store closings.

WILD CARD #4: Target goes private. While it would be a massive deal, removing Target from the public markets could give the company the air cover it needs to make the bold moves it must. It might also save Brian Cornell’s job (and give him a shot at preerving his legacy)

9. Store closings to exceed store openings (again).

As I’ve been saying for years: Physical retail isn’t dead. Boring retail is. And sales through brick-and-mortar locations are likely to be up again this year. But the post-Covid bump is gone and there is still a lot of mediocre real estate chasing contracting demand.

While stores can be important drivers of online sales, the fact that digital volume growth far outstrips transactions rung up in a physical location does generally mean less real estate is needed. Inflation remains an issue, interest rates aren’t coming down quicklly, and more revenue is being concentrated with hyper-scale retailers putting more and more pressure on those brands stuck in the mediocre middle All this will push many more locations to shutter.

Shortly after I first made disclosed this prediction, Coresight Research suggested a huge spike is on the horizon. My guess is the number will be closer to 10,000 than the more than 15,000 theu suggest—but either way this will be a rough year for many unremarkable retailers.

10. Amazon Grocery Dreams Remain Sleepy

Amazon’s been jonesing for a much bigger physical grocery store presence for a long time. It started with their acquisition of Whole Foods in 2017, where performance since has been a decidedly mixed bag. Yet Whole Foods’ niche positioning will never get it to the scale and scope Amazon desires for both product sales and all important retail media dollars. Enter Amazon Fresh.

Amazon Fresh has gone through multiple iterations and with the recent prototype they may be getting closer to something with major roll-out potential. But big questions remain, primarily around whether what Amazon offers can steal meaningful share from huge established players like Walmart, Kroger, and Costco and do so profitably. All this leads to be predict that this will be yet another year of tinkering with no big plans for a roll-out to be announced.

WILD CARD #5: Another grocery acquisition? Years to get to scale and competitive battle concerns go out the window if Amazon can acquire a major grocery store where it can leverage it’s vast supply chain, Prime program, and advertising business. But even with an administration that is far friendlier to deal making, this seems like a big stretch. A non-grocery deal (Wayfair anyone?) seems more probable.

11. Let’s Make a Deal

Things have been slowish for a couple of years, but I expect both the IPO (Shein? Vuori? Catalyst Brands) and the M&A markets to heap up substantially. In particular I see disruptor brands that have built decent brands with largely crappy economics, get scooped up by bigger players. Allbirds, Away, ThredUp, and various beauty brands are on my list.

Macy’s and Kohl’s (and maybe even Dillard’s) will likely face renewed “go private” interest, but I don’t see these deals going anywhere.

12. Retailers brace for the Ozempic recession

1 in 8 Americans have used GLP-1 drugs and the results are often profound—both for the indicated use (diabetes) as well off-label use for weight reduction. Studies are also showing efficacy in reducing addictive cravings, heart and kidney disease, depression, and more.

The compounds are already experiencing rapid growth, but wide-spread usage is limited by cost and ease of use. But this could all change dramatically with new, cheaper to produce compounds, one a year injections and availability in pill form.

When we see an inflection in what is already rapid growth, is anyone’s guess. But as users consume something like 6% fewer calories and eat in fundamentally different ways (more product, more fiber), food manufacturers need to step up their game with product innovation and potential specialty food acquisitions. Retailers will need to go through some potentially significant shifts in their product assortments, store layouts, and marketing plans.

.For a more fulsome discussion of Pat 2 of my predictions, check out this week’s episode of the Remarkable Retail podcast.