“Like many of you, I returned from a long President’s Day weekend to an inbox full of bad news for brick-and-mortar. Both Bi-Lo, the company behind Winn-Dixie, and Tops Markets were expected to ﬁle for bankruptcy, citing stiﬀ competition from Amazon and other low-cost rivals. Oh, and Walmart missed its earnings targets. Perhaps ﬁttingly, the bad news was delivered at the same time Amazon was announcing the merger of its AmazonFresh and Prime Now delivery services, expected to streamline grocery delivery from the company’s Whole Foods stores.
‘It appears brick-and-mortar walls really are crumbling and that e-commerce is becoming more eﬃcient,’ said an e-mail from Don Stuart, managing director at Cadent Consulting and one of my go-to sources. In the subject line: ‘Could Feb. 20 prove to be the most telling day in retail history?’ Yikes!”
“Some of the inevitable store closures might not be a bad thing, given that the United States is so overstored. (Stuart says we’ve got ﬁve times the retail space per capita versus many European countries.) Still, it’s gonna hurt. Who’s at risk? Retailers trapped in the middle, neither low cost nor high quality.”
“‘I expect to see retailers continue to winnow out national brands and build up their store brands as a key point of diﬀerentiation,’ says Stuart, who believes there’s no reason private label shares in the U.S. should languish in the 17% to 18% range when many European countries are 40%+. And what better way to carve out your own unique niche — and enjoy signiﬁcantly better margins in the process?”