Retail Unwrapped from The Robin Report

Think You’re in Control Shopping for Groceries? Wrong!

Phil Lempert — Tue, 03 Feb 2026 05:01:00 +0000

You think you’re in control of what you choose in a supermarket? Well, sorry to report, but you’ve been played. You don’t decide what you buy at the grocery store. An algorithm does. Welcome to the brave new world of the Agentic AI shopping experience. Your grocery trip is an experiment—and you’re the test subject. You’re not in control and here’s why.

Pricing and promotions are manipulated just for you. You think the electronic shelf price is the same for everyone? The offers hitting your phone, your inbox, and your app are tuned into you—your income bracket, your brand loyalties, your preferences and soft spots. And you gave it all permission. That’s the promise of AI, as long as it doesn’t terrify you.

Think about it. You signed up for loyalty programs. But they aren’t just about rewarding you—it’s a brilliant way to deliver exactly what you want based on what the data has recorded. It’s a win-win if you think about it. You provide access to your personal data, and your local store becomes your personal shopper.

Every scan of your card, every clipped coupon, every “substitute” you accept when something’s out of stock is recorded. You’re not just earning points; you’re teaching the system how to give you what exactly you want.

This is not a bad thing if you want a seamless, stress-free shopping experience. The more you let AI know, the more your local shopping experience can make your life easier. We’re just entering this new world on steroids where AI data accelerates the information you give it to deliver an experience that makes you the most important priority.

Is this creeping you out? Don’t panic. You can limit what AI can access and control the world curated just for you. If it does creep you out, be aware, be informed. But when you think about it, we’re entering a social contract with Agentic AI that can make our lives easier. That’s not so bad.

Will the New FDA Guidelines Change How We Shop for Food?

Phil Lempert — Thu, 22 Jan 2026 05:01:00 +0000

Big Shift: “Real Food” Circles the Aisles

The core message of the new Dietary Guidelines for Americans is to eat more whole foods, more protein, and fewer highly processed, sugary items. It aligns almost perfectly with how many shoppers already say what they want to eat. For retailers, that means the perimeter of the store (produce, meat, seafood, dairy, bakery) is now explicitly backed by federal guidance as the default starting point for healthier choices. But don’t expect these grocers to stop selling high-margin snacks, sodas, candies and ultra-processed foods…unless shoppers stop buying them. Retailers respond to two major things: consumer demand and manufacturer incentives and promotions.

Very few would argue against the explicit call to reduce added sugars and ultra-processed foods, which the USDA estimates make up 70 percent of the foods on our supermarket shelves. However, we are still awaiting a standard definition from the FDA, HHS and USDA for the exact definition of an UPF. Is it ultra-chemically processed, overly salty or sugary, high-fat, highly caloric, synthetic …what is it? Until that is finalized, we are unlikely to see a major shift in consumption behaviors any time soon.

How will the new dietary guidelines reshape the grocery store? And the answer is: The core of the store is officially on warning of a higher risk, according to the government.

The Slow Food Movement

Food manufacturers, for both national and store brands, don’t pivot overnight. Reformulating a product from swapping out artificial colors and dyes, reducing sugar, and removing artificial additives can take anywhere from several months to multiple years, depending on the complexity of manufacturing to the challenges of delivering taste, texture, cost and food safety. And who knows if consumer demand will even be there for these new products. PepsiCo is hedging its bets with the launch of Simply NKD Doritos and Cheetos, which have removed artificial colors and flavors, resulting in a pale yellow color (instead of the bright orange that we are used to licking off our fingers). The company is not replacing the originals, just offering these as an alternative, and to test whether or not a consumer will make the switch.

For most shoppers pushing a cart through the supermarket aisles, these new guidelines won’t change much, at least not right away. It’s important to note that these guidelines are not laws that stipulate what one can buy or what the supermarket can sell. The question is whether the Make America Healthy Again and related guidelines will have a downstream effect on store layouts and promotions.

Will the CPG companies reformulating products to healthier change shopping behaviors? We are likely to see more in-store signage and displays that promote meat, dairy, eggs and produce as “guideline-friendly.” We anticipate more CPG brands hurrying to reformulate products to avoid being thought of as “bad food.” Front-of-pack claims will likely promote “now with less sugar” and “made with whole grains.” Expect also to see “better-for-you” messaging ramping up on supermarkets websites, apps and in-store. Target, for example, announced that it is expanding its wellness assortment, including protein products and nonalcoholic beverages by 30 percent and holding ‘wellness week’ savings events. Is it optics and posturing or the real thing? Retailers and CPG never miss a moment to glom onto the next trend. For the health of the nation, we hope it’s not just confirmation bias.

Margin Opportunity vs. Message Risk

The elevation of protein, especially meat and whole‑fat dairy, creates clear sales opportunities, but also potential reputational and health pitfalls if the story stops at just eating “more protein.” Many nutritionists and health professionals are questioning these recommendations. Health organizations, including the American Heart Association, warn that emphasizing full‑fat animal products without equal focus on saturated‑fat limits and plant‑based proteins sends mixed messages, and retailers that lean too hard into RFK, Jr.’s “butter and beef are back” marketing messaging risk being seen as out of step with heart‑health guidance.

“Limit alcoholic beverages: Consume less alcohol for better overall health” is a big departure from the previous guidance of one drink a day for women and two for men – contradicting the Surgeon General’s 2025 Advisory on the link between alcohol and cancer risk. To hedge all the contradictory bets, supermarkets that sell alcohol might consider merchandising beer, wines and distilled beverages with non-alcoholic offerings integrated in their displays, especially since this market is booming among millennials and Gen Z who seek moderation and more innovative alternatives.

Will the Guidelines Take Hold or Will We Go Back to Donuts?

Dietary advice is a moving target. Eat fewer eggs, then a year later, hey, eggs are okay to eat. Fat is bad and will clog your arteries. Now fat is back. Carbs are bad, then carb loading becomes the trend. Research shows that while labeling and nutrition information can shift purchases, the effect is strongest when the “healthy” option doesn’t sacrifice taste. It’s not surprising that the consumer is mystified about what’s true, safe and sustainable. Aligning external signals with internalized food behavior is a science unto itself.

Only time will tell if PepsiCo’s Simply Naked line works when a shopper is faced with making the choice. Remember that starting with the boomers, our senses and taste buds have been trained on artificial flavors and colors. The TV dinners, CPG innovations in convenience and shelf life, transformed an entire generation’s palate.

The real test for these guidelines is whether the collective power of the grocery industry, retailers and manufacturers will take the healthier path, or the path of least resistance. My bet is that despite all the guidelines, logic and nutritional advice, the donut aisle will stay just as irresistible as ever.

Why Your Grocery Store Wants You to Be Lonely

Phil Lempert — Tue, 30 Dec 2025 05:01:00 +0000

Walk into any modern supermarket and you’ll see the opportunism loneliness offers. In-store cafés with community seating. Cooking classes. Wine tastings. Sushi bars. Oyster bars. Even full sit-down restaurants. Wegmans’ Manhattan location dedicates an entire floor to prepared foods and dining. This isn’t about service—it’s about dwell time…and spending extra money.

The data is clear: Lonely shoppers stay longer. They linger at those café tables. They browse. And they spend more money. A quick trip for milk becomes 45 minutes at the community table and $60 in the basket because that store felt like somewhere to be.

Now, I’m not saying these spaces are inherently bad. But when retailers engineer these environments to monetize loneliness rather than genuinely solve for human connection, we’ve crossed a line.

So, here’s how we get our resilience back.

First, recognize what’s happening. That café table is optimized to keep you in the store longer, not to build lasting friendships.
Second, create real community outside the supermarket. Join an actual cooking club. Shop farmers markets where conversations with growers matter. Host dinners at home.
And third, support retailers who build community spaces because they genuinely care about their neighborhoods—not just because lonely customers have higher basket sizes.

We don’t need stores that profit from our isolation. We need stores that help us overcome it.

A Wake-Up Call for Big Food

Phil Lempert — Thu, 18 Dec 2025 05:01:00 +0000

Well, the gloves are officially off, and the food fight is on. San Francisco City Attorney David Chiu has filed a lawsuit against ten of America’s biggest food companies—we’re talking Kraft Heinz, PepsiCo, Coca-Cola, Mondelez, Post, Kellogg/Kellanova, Mars, ConAgra, General Mills, and Nestlé. For the first time ever, a government body is dusting off the old Big Tobacco playbook and aiming it squarely at ultra-processed foods. The accusation is that these companies knowingly designed addictive, harmful products and then hid that truth from all of us.

Here’s the uncomfortable truth the food industry doesn’t want to talk about: This lawsuit isn't a joke. It's backed by a mountain of research linking these foods to obesity, diabetes, heart disease, and even cancer.

Processed Food Reckoning

Make no mistake; whether this lawsuit wins or loses in court doesn’t really matter. It has already won, because it’s forcing the conversation. For food brands, the choice is simple: Change on your own terms now or be forced to change later by regulators and angry customers. For retailers, the question is just as stark: Are you going to be part of the solution, or are you going to get lumped in with the problem? For decades, the food industry has optimized for taste, shelf life, and profit. The next decade will be all about optimizing for something much harder, but far more important: our health.

The Big Tobacco comparison isn’t just for show. When Chiu brings up tobacco, it’s a deliberate and legally powerful play. The lawsuits against tobacco companies set a clear precedent—a company can be held liable if it knows its products are harmful, engineers them to be more addictive, and then misleads or lies to the public about it. This San Francisco AG lawsuit asks a simple question: Have food manufacturers been doing just that?

The stakes here are massive, with huge implications for both the brands and grocery retailers. To be clear, this isn’t about a handful of junk foods. FDA researchers estimate that a staggering 73 percent of the U.S. food supply is ultra-processed. The effect could well be removing almost three-quarters of the products off the shelves in San Francisco and just imagine if other cities or states do the same thing. The reality is that for adults, UPF foods make up more than half of our daily calories. And for kids, it’s even worse, a frightening 62 percent.

What makes this interesting to me is the strange-bedfellows alliance. On the one hand, there is a progressive city like San Francisco suing food giants, on the other is Robert F. Kennedy Jr.’s Make America Healthy Again Commission calling out ultra-processed foods for driving chronic diseases in children. This is not simply politics; it’s pressure from both sides that should have every CPG and retail executive sweating.

Course Correction

What does this mean for food brands? The era of tiny, incremental changes to veil the problem is over. Reformulating to reduce a few grams of sugar or salt while keeping the basic, ultra-processed structure of a product isn’t going to work anymore.

The industry is facing three hard choices:

First, they must get serious about radical reformulation. I’m not talking about removing a dye or preservative here or an additive there. It is time to go back to the drawing board and completely rethink how products are made. That means shorter ingredient lists with words shoppers can pronounce, and yes, it will mean higher costs and shorter shelf lives.
Second is transparency. The old “we didn’t know” defense that tobacco companies tried won’t work in 2026. Companies need to get out in front of this. They need to talk openly about the trade-offs they make and their implications for taste, texture and potential allergens, about how they design for “palatability,” and what their own research says about health. Staying silent looks like an admission of guilt.
Lastly, some products might just be indefensible. The smartest companies will start phasing out their most problematic foods now, before the government or the courts do it for them. They’ll get ahead of the story, control the narrative, and come out looking like heroes instead of victims. By-bye Twinkies.

Take Responsibility

The industry trade groups’ responses, which for years have been touting their “efforts to improve nutrition” while warning against “demonizing certain foods,” sound like they came from a corporate crisis playbook from 1965. It’s defensive, vague, and basically pats consumers and regulators on the head as if they’re just overreacting. We are just not going to accept that behavior anymore.

No question, grocers are caught in the middle of this, but they have a real chance to be leaders, not just sitting on the sidelines. Forward-thinking retailers need to take a hard look at center store. If in fact, 73 percent of our food supply is ultra-processed, that means your supermarket shelves are too. Figure out which products are the biggest liabilities. And when it comes to the fastest growing segment of your business, private label, you need to also be serious about expanding better-for-you options as well as reformulations. This lawsuit is going to make headlines and make shoppers more anxious and aware. Grocery stores that offer them affordable, less-processed alternatives will win their trust and their money. This isn’t about creating a tiny “health food” section; it’s about making better food the new normal throughout the entire store.

Smart retailers also know that more regulation is coming, whether it’s new warning labels or updated dietary guidelines. The ones who start adapting now will be miles ahead of those who wait.

Litigation Pressure

Here’s the uncomfortable truth the food industry doesn’t want to talk about: This lawsuit isn’t a joke. It’s backed by a mountain of research linking these foods to obesity, diabetes, heart disease, and even cancer; and has someone in the White House who (for better or worse) is unrelenting. The science may not be 100 percent settled, but the trend is pointing in a very clear, very scary direction.

Some nutritionists correctly point out that not every single ultra-processed food is evil—some breads or peanut butters, for example, have a place. That kind of nuance gets lost when you’re defending products that are basically just sugar, salt, and lab-made flavors. The industry’s argument can’t be “not all ultra-processed foods are bad.” That’s like saying “not all cigarettes will kill you.” It might be technically true, but it completely misses the point.

Even if this San Francisco lawsuit fails, the genie is out of the bottle, and as the saying goes, what starts in California spreads to the rest of the nation. Other cities and states are watching. Shoppers are getting smarter and more skeptical. And with RFK Jr. in the Trump administration, ultra-processed foods now have a target on their back at the federal level. CPG and retailers need to pay attention now more than ever.

Tip Fatigue Is Real: It’s Killing Trust

Phil Lempert — Wed, 26 Nov 2025 05:01:00 +0000

Let me be blunt. We’ve reached peak absurdity in American tipping culture, and retailers—particularly in foodservice—need to wake up before they alienate an entire generation of customers. A couple of weeks ago, I spent a few days at the Hilton Garden Inn in Ithaca, New York, and what I saw upset me enough to write this column. On the desk in my room was a placard asking me to tip for housekeeping, something we have all seen in hotels for decades. But this time it was different, it showcased a QR code to make my tipping ‘easier.’ I should add that the desk contained no note paper, pen or other typical amenities we have come to expect.

Research shows that consumers react negatively to service charges added for them, even when those charges would have been voluntary tips. They want to see the breakdown, but they also want to feel in control.

Tipping Burnout

I’ve been tracking consumer behavior for decades, and I can tell you without hesitation that the explosion of tipping prompts at every point of a transaction is not just annoying me and many customers; it’s fundamentally breaking down the trust between retailers and consumers. Nowhere is this more egregious than in quick-service restaurants, where you simply pick up your food and go, and in hotels, where you’re being guilt-tripped into tipping for services that used to be included in your room rate.

Most of Europe figured this out decades ago. They pay service workers a living wage, include service in the price, and treat tips as a genuine bonus for exceptional service—usually just 5-10 percent when it is deserved. But American retailers? We’re doubling down on a broken system and using technology to guilt customers into subsidizing corporate payrolls.

What Europe Got Right (and We Get Wrong)

Before I dive into the current American tipping disaster, let’s talk about how the rest of the world handles this. France legally requires restaurants to include a 15 percent service charge (service compris). In Germany, servers earn between €13-20 per hour before any tips. Sweden and Denmark have such strong labor protections that tipping is often rejected as unnecessary. Italy uses the term la mancia, which means “from the sleeve,” a gift, not an obligation.

What’s fascinating is that in the research in prepping this column I discovered the Journal of Tourism, Culture and Communication, that studied tipping patterns across seven European countries. It found that even though service is included, customers still tip when they receive good service. A 2023 study in the International Journal of Hospitality Management found that income and payment method are the strongest predictors of whether Europeans tip, while bill size determines how much, proving that social norms, not obligation, drive tipping behavior when workers are already paid fairly. The European model works because it’s honest and transparent. Menu prices reflect the true cost of doing business, including fair wages. Customers know what they’ll pay. Workers have income security. Nobody feels ambushed at checkout.

When American restaurants tried to adopt this model, it largely failed. Why? Because we’re the only ones doing it. Danny Meyer’s (the entrepreneur behind Shake Shack, Union Square, Gramercy Tavern and other award-winning restaurants) well-intentioned experiment proved that you can’t revolutionize tipping culture while your competitors across the street still operate on the old model. His innovation was to include service charges in the menu prices. Yet, customers perceived higher menu prices as “expensive” even though they were ultimately paying the same total amount. Meyer’s experiment was brilliant on paper: Raise menu prices, pay staff fairly across the front and back of the house, and eliminate the awkwardness and inequity of tipping. So why did it fail? Customer psychology. That $12 burger became a $14.50 burger. In a real-life example of illogical human behavior, customers wouldn’t pay what they perceived as more expensive, even though they would have willingly paid $12 plus a $2.50 tip.

Joe’s Crab Shack, the first large U.S. chain to implement a no-tip model, abandoned the experiment after just three months. Multiple high-profile restaurants that eliminated tipping eventually brought it back because they were losing front-of-house staff to competitors where they could still make tip money.

The Psychology of Why We Tip (It’s Being Weaponized Against Us)

A recent study published in Management Science by researchers at Tel Aviv University found that tipping is driven by two main forces: genuine gratitude for service and social conformity, that is, the pressure to do what everyone else does. How often have you been in a situation where you split a restaurant bill with another person and then ask, “How much of a tip are you leaving?” Conformity is particularly powerful.

Those digital tip screens are so effective and so manipulative. Research from ScienceDirect published in the Journal of Business Research found that explicit requests to tip actually create “psychological reactance—a threat to customer autonomy.” The study showed that when service providers explicitly ask for tips (especially through digital prompts), it triggers social pressure that hampers one’s perceived control. Customers feel trapped: say no and you’re a jerk; say yes and you’re now subsidizing a business model you didn’t agree to.

Studies published in the Journal of Applied Social Psychology also reveal that tipping behavior reflects racial and gender biases. Female servers may tolerate inappropriate behavior to avoid losing tips, or more attractive servers of both sexes may receive greater tips. A Cornell University study also found that customers tend to tip servers of their own ethnicity more generously.

The Counter-Service Conundrum

Here’s the reality: Average tips at quick-service restaurants have declined from a pandemic high of 16.5 percent in 2021 to 15.8 percent in Q3 2024. Customers are pushing back. They’re tired of being asked to tip 20, 25, or even 30 percent when they’re standing at a counter, placing their own order, filling their own drinks, and carrying their own food to a table. This resistance is especially dramatic now when consumers feel the pressure as prices continue to rise across all sectors, from food and imported apparel to footwear.

In late October, PopMenu’s research found that a staggering 66 percent of consumers say they “sometimes or always” feel pressured to tip when an iPad or digital interface asks them to, even when it’s just a takeout coffee order. And it’s not a new phenomenon. I vividly remember the first time I bought a suit at the now-defunct (and much missed) Barney’s on Seventh Avenue and 17^th Street. My salesman quietly told me to be sure that I tipped the tailor at least $20 to make sure I received the best tailoring. And that was in 1975!

Behind the Curtain

Let’s talk about what’s really happening. For supermarket and restaurant delivery and takeout, 29 percent of diners don’t tip at all; only 12 percent say they tip 20 percent or more. This massive disparity tells me that consumers fundamentally don’t agree on what deserves a tip anymore for convenience and personal service.

The data is clear: Yelp reviews mentioning “tipflation” increased 399 percent from May 2023 to April 2024. Customers are willing to tip generously for full service and exceptional experiences, but they’re rebelling against tip prompts where minimal service is provided. A Horizon Media survey found that 81 percent of consumers preferred the status quo of voluntary tipping. Why? Back to Danny Meyer, 55 percent worried that building a service charge into menu prices would force them to pay the tip whether the service was good or bad. In fact, 52 percent wanted control over how much they paid rather than having a flat fee imposed.

The Hilton Horror Show

Back in Ithaca, when I checked into the Hilton Garden Inn, I saw tipping culture at its most obnoxious. Hilton is not the only one; major hotel chains are also placing these QR codes on signs in hotel rooms, asking guests to tip. Hilton’s CEO acknowledged he doesn’t tip housekeeping himself. Think about that. The CEO of a multibillion-dollar hotel chain doesn’t tip the housekeepers, but he’s asking me to do it! And here’s the kicker, many Hilton properties (including the one in Ithaca) only provide housekeeping every other day, or upon request. So, I’m being asked to tip for a service that’s been reduced or eliminated.

In 2014, Marriott started putting envelopes in hotel rooms to encourage housekeeping tips. But full disclosure, HEI Hotels & resorts CEO Ted Darnall admitted encouraging tipping was a way to avoid raising wages. There it is—the inconvenient truth. These corporations are using guilt-driven technology to outsource their labor costs to customers who are already paying premium prices for rooms. Technology brands are partners in crime. Hotels are now offering digital tipping through Apple Pay, Google Pay, and Venmo, making it easier than ever to guilt guests into tipping. They say this payment option is designed specifically to reduce “friction,” which is corporate-speak for making it harder for you to say no.

What This Means for All Retailers

Tip fatigue is real and measurable. The average tip on Square’s digital food and beverage transactions fell to 14.9 percent in Q2 2025 from 15.5 percent in 2023. The overall tipping average for restaurants came in at 18.8 percent in Q3 2024, down from 19 percent in Q3 2022. While .2 percentage points may not seem life-changing, in the aggregate, customers are actively tipping less because they’re being asked to tip everywhere at a time when most people are feeling the pinch on higher prices on just about everything.
Transparency matters more than ever. Research shows that consumers react negatively to service charges added for them, even when those charges would have been voluntary tips. They want to see the breakdown, but they also want to feel in control. This is why automatic service fees, including those listed as health and welfare for the kitchen staff, have sparked backlash.
Set reasonable expectations. If you must have tip prompts at counter service, list reasonable amounts: 15, 18, 20—not 25 or 30 percent. Better yet, make tipping truly voluntary. Here’s an idea. How about communicating “Tips are appreciated but never expected” at counter-service establishments?
Pay your people fairly. This is core to the problem. If you can’t afford to pay your workers a living wage without relying on customer tips, your business model is broken. Fix your model, don’t guilt-trip your customers.

The Bottom Line

We’re at an inflection point. The number of people who “always tip” has dropped from 77 percent in 2019 to 65 percent in 2023. This isn’t because customers have become stingy—it’s because they’ve been asked to subsidize corporate profits one QR code at a time.

For retailers, especially in foodservice, the message is clear: Respect your customers’ intelligence and their wallets. If you’re providing minimal service, don’t ask for maximum tips. If you’re a hotel charging $300 a night, pay your housekeepers a decent wage instead of asking guests to scan a QR code to make up the difference.

The companies that figure this out—that understand tipping should be reserved for authentic service, not automated transactions—will win the loyalty war. The ones that keep pushing QR codes and guilt trips will find themselves on the wrong side of a consumer backlash that’s already well underway.

Trust me on this. Your customers are keeping score. And right now, retailers are losing.

What Will Pringles Think of Next to Sell More Chips?

Phil Lempert — Tue, 18 Nov 2025 05:01:00 +0000

Would you pay $19.99 for a can of Pringles and a trinket? Well, meet the Once You Pop Mystery Box—Pringles’ first-ever direct-to-consumer product. Inside each box, you get two cans. One contains a mystery flavor. The other? One of six collectible Pringamabobs. Not an original idea; remember the prizes in Cracker Jacks? These little crisp-inspired characters with names like Snaxolotl and Duckalips are bag charms that they hope tap directly into Gen Z and millennial collecting culture. They’re doing limited drops during November on the 7th, 14th, and 21st at noon Eastern time hoping to create buzz through scarcity and urgency. Of course, they’ve partnered with unboxing influencers. This isn’t just about selling or eating chips. It’s about creating community, conversation, and yes FoMO—the fear of missing out. Pringles is hoping that today’s consumers don’t just want products. They want experiences, stories, and something to share on social media. Will the mystery flavor be worth the hype?

Jack Sinclair Is a Retail Radical

Phil Lempert — Wed, 12 Nov 2025 05:01:00 +0000

In an era when most grocery CEOs are chasing the same playbook—bigger stores, more SKUs, omnichannel everything—Jack Sinclair, CEO of Sprouts Farmers Market, is doing something almost unthinkable in retail: He’s making stores smaller, cutting selection, and deliberately ignoring 85 percent of the market. And it’s working brilliantly. The net profit margin for Sprouts reached 4.9 percent in the recent fiscal year. According to the FMI Food Industry Facts the average net profit for food retailers in 2024 was 1.7 percent and Sprouts beats that by almost 3 times!

As Sinclair says, “Our marketing efforts center on new store openings and curated products are all focused on our target customer who represents $290B out of the $1.6T food-at-home market. We recognize that we can’t be everything to everyone, so we concentrate on areas where we can win. That’s why we position ourselves as a specialty grocery retailer, offering the fresh quality of your local farmers market, along with the widest assortment of specialty items to suit various specific lifestyles. We attract a particular customer who’s very choiceful and cares about their food—its tastes, its impact on their health and where it comes from.”

The Innovation Center, branded as the “New for You Destination” in each Sprout’s store started popping up in new stores in 2021 and serves as both discovery zone and product incubator, giving entrepreneurial food companies a platform to introduce unique products. For customers, it creates a reason to return frequently and give them the opportunity to be trendsetters by offering them new and unique offerings.

Iconoclast and Icon

Sinclair’s grocery path began in Glasgow, Scotland where he stocked grocery shelves and moved onto some of the biggest names in supermarketing—from Safeway PLC to Tesco and then headed across the pond to Walmart and 99 Cents Only Stores. He now serves as CEO of the publicly traded Sprouts which was founded in 2002 by the Boney family.

Not since Joe Coulombe founder Trader Joe’s in 1967 decided to stock just 4,000 SKUs instead of 40,000, have we seen a grocery executive so boldly zig while the industry zags. Sinclair’s contrarian approach is delivering extraordinary results—Sprouts’ stock has surged 240 percent over the past year, comparable store sales have grown 8.4 percent, and net income jumped 47 percent in fiscal 2024 to $380.6 million on sales of $7.72 billion. But these numbers tell only part of the story. What makes Sinclair a true retail radical is his willingness to fundamentally reimagine what a successful grocery chain can be in 2025.

Most CEOs dream of total market domination. Sinclair dreams smaller—intentionally. He his audacious strategy with characteristic clarity: “The grocery industry is worth about $1.4 trillion. We’ve said we’re just going to go after $200 billion, which means we’re ignoring $1.2 trillion dollars.”

Competitors scramble to be everything to everyone, Sinclair has laser-focused Sprouts on what he calls “health enthusiasts and innovation seekers,” roughly one in seven or eight Americans. As he puts it, ” Sprouts customers are health enthusiasts and selective shoppers. They seek differentiated, attribute-driven healthy products that cater to their various needs, be that organic, vegan, paleo, or keto. They enjoy exploring culinary trends and prefer fresh, quality options, viewing Sprouts as a trusted partner in their healthy eating journey.”

Shrinking to Grow

In retail, bigger has always been better—until Sinclair flipped the script. When he joined Sprouts in June 2019, the company was operating stores averaging 30,000 to 32,000 square feet. Today, new Sprouts locations are a streamlined 23,000 square feet—a 30 percent reduction that flies in the face of conventional retail grocery real estate strategy.

But here’s the genius: these smaller stores aren’t sacrificing product selection. Instead, they’re eliminating what Sinclair calls “inefficient spaces and costly decorative elements.” The result: lower construction costs, reduced operating expenses, faster profitability, and ironically, a better shopping experience. The format prioritizes what matters to Sprouts’ customers: Produce is placed at the heart of the store, there are robust vitamins and supplements sections, expanded bulk offerings, and innovative specialty items. What’s been cut? Elaborate service counters and decorative flourishes that looked impressive but didn’t drive the business.

This de-risking strategy is paying dividends. Smaller stores hit profitability at lower revenue thresholds, making Sprouts’ aggressive expansion plan—currently 478 stores in 24 states with plans to exceed 1,400 locations. The company opened 33 new stores in 2024, plans to open 35 in 2025 and projects continued double-digit unit growth.

The Treasure Hunt

Perhaps no tactic better exemplifies Sinclair’s radical approach than his “treasure hunt” merchandising strategy. Sprouts rotates approximately 7,100 new items annually meaning roughly 35 percent of the assortment changes each year. He explains, “We created a foraging team of merchants who explore the world for new and unique products and flavors. To enhance the shopping experience, we have created our ‘New For You’ innovation center, which highlights the latest innovative products that often make their debut at Sprouts. This center is updated frequently to show the newest and most distinctive products not sold elsewhere, keeping our customers coming back for more. We also form partnerships with both small and large entrepreneurial companies whose values and lifestyles align with those of our customers. Additionally, we have a three-year pipeline of innovation with Sprouts Brand products. Many of these exclusive products rotate seasonally, ensuring that we continually bring back our customers looking for both new and old favorites.”

Sinclair adds, “Our team is our greatest asset, and we are committed to fostering a culture that supports their success and continued innovation. Looking ahead, we’ve got some exciting initiatives underway that will further propel our innovation. These plans include showcasing even more ‘New For You’ products in our stores, expanding our loyalty program nationally by the end of the year, strengthening our advantaged supply chain for fresher products and building exceptional stores that are enjoyable to shop in. To sustain this innovation, we integrate departments as much as possible, opening the doors for communication, ideation and ultimately, even more innovation!”

The Anti-Technology Technologist

In perhaps his most contrarian stance, Sinclair openly questions the industry’s technology obsession. “I’m not super excited about technology within a food store. I think a food store should be about what it sells, not how it sells it.” This isn’t Luddism—it’s prioritization. While Sprouts uses Instacart and DoorDash for ecommerce (which grew from 2 percent to 11 percent of sales), and runs data pilot programs in Nashville and Tucson, Sinclair refuses to let flashy tech distract from the core mission: curating exceptional products and creating an engaging in-store experience. Where Sinclair does embrace technology is in data analytics and AI to better understand Sprouts’ specialized customer base. “The thing that AI will do, and is already doing, is significantly improving the context of how you can understand the data,” he explains.

Purpose Driven

Sprouts has a purpose-driven culture. The company’s values—Care, Love Being Different, and Own It—emerged from conversations with 5,000 employees. “We’ve been very articulate about the purpose of our business,” Sinclair says. “That can be a galvanizing factor for the team. It’s based on the DNA of the people, the Boney family, who started this company in 2002. The premise of that DNA is if people eat a bit better, they’ll be a bit healthier and they’ll live a better life.”

Sinclair’s approach to sustainability embodies what he calls “doing good by doing good;” initiatives that benefit both the planet and the bottom line. New distribution centers in California, Colorado, and Florida have eliminated approximately 1.5 million miles of road transport. The Fullerton, California facility features an innovative solar energy system that manages costs while reducing environmental impact.

“What I love about Jack Sinclair is that he makes retail feel human again. He’s not chasing scale or flash; he’s using data and instinct to actually understand people—sometimes better than they understand themselves. That’s what great leaders do. They make the complex feel simple, and the simple feel worth caring about. That’s real retail radical energy,” says Matthew Cyr, Founder & CEO, Crave Retail.

The combination of radical business strategy married to genuine purpose is why Jack Sinclair is a Robin Report 2025 Retail Radical. He’s proving that in an industry obsessed with scale and sameness, the real revolution comes from clarity, courage, and an unwavering commitment to serving a specific customer exceptionally well. He says, “We want to be different, and we encourage our teams to constantly innovate in the grocery sector. We love that we are at the forefront of a health and wellness movement and helping people live and eat better.”

Sinclair adds, “I’ve certainly been lucky, and retail has given me a rewarding career. I encourage young people entering the industry to ‘dance in the middle of the dance floor.’ Grocery retail is so important to customers, and you have an opportunity to make a difference in people’s lives. Focus on what’s in front of you rather than what’s way ahead; love the challenge of meeting customers’ expectations every day.”

About the Retail Radicals

The 2025 Crave Retail Radicals Awards include Le Bon Marché, Build-A-Bear Workshops, Pacsun, SKIMS and Sprouts. For the past seven years, we have identified radical thinkers and doers (innovators and entrepreneurial leaders) driving major transformations within their respective retail brands. In a marketplace that is defined by transactions and risk-avoidance, these five retailers have bucked the trend and are helping to transform the industry by rewriting the rules of retail by being bold and brave. Each is a role model for keeping retail relevant and vibrant, and exceeding expectations experientially and financially.

Off the Shelf: A Tricky Halloween

Phil Lempert — Tue, 28 Oct 2025 04:01:00 +0000

You’d think that we’d all get a break this Halloween to kick off the holiday season. Well, think again.

First off, on the candy front, expect higher prices and smaller sizes. The average individual candy bar is 10 to 15% smaller this year for the same price – or worse, for more. Hershey raised prices by double digits. A 48-count box of full-size bars that cost $40 last year is now $50. So how is Hershey responding? With a switch pitch to smaller vampire-shaped Kit Kats. Really? It’s a race to the Halloween bottom. The candy price wars began in September. In fact, Halloween shopping started so early that Mars christened it “Summerween.” Wonder what brand manager came up with that one? Kroger launched its Halloween candy sale, maybe a bit too late, in mid-October discounting many brands up to 33% off regular price.

And here’s breaking news, Americans top 3 favorite Halloween treats are chocolates, gummy candies, and candy corn. And guess what? Mississippi, Nebraska, and Kentucky are the top three states when it comes to buying candy corn, and almost a third of us start eating candy corn at the white end. Who knew? Who cares? I know like 3 people who actually like candy corn.

And then we have the tariffs. Roughly 90% of Halloween costumes contain at least one component made in China. With tariffs hitting as high as 145%, costume prices have jumped. To put it into perspective, some costumes that sold for $20 last year will cost $40 this year.

The bottom line? Halloween 2025 is going to be a test of consumer resilience and retail creativity. This year it’s all about getting tricked, not treated.

Kith Ivy and Erewhon: Membership Match Made in Heaven

Phil Lempert — Wed, 08 Oct 2025 04:01:00 +0000

If you think the private club scene in New York City is a relic of the Gilded Age, think again. As someone who’s spent decades tracking food and dining trends, I’m witnessing a fascinating renaissance of exclusive member-only establishments that are redefining what it means to dine, drink, and shop in a city that never sleeps. But this isn’t your grandfather’s stuffy gentleman’s club – today’s private clubs are sophisticated food destinations that are attracting a new generation of discerning New Yorkers, and there are reports that LA chic grocer Erewhon is coming to the West Village to operate within a private members-only club in Kith Ivy’s wellness and padel club. For anyone not familiar with Erewhon, it’s LA’s trendy place to shop for bespoke, decidedly upscale food and provisions. In a sense, it’s already a private club for loyal, high-profile customers who intentionally dress down to be seen and publicized by the paparazzi.

Think about the possibilities. An Erewhon partnership with Kith Ivy could offer club-exclusive products, limited releases, or members-only wellness events with celebrity nutritionists. This mini Erewhon outlet could have at its core the well-instagrammed celebrity smoothies, including Hailey Bieber’s $20 Strawberry Glaze Skin Smoothie and Jasmine Tookes’ $22 Golden Hour Glow Smoothie.

Members Only

Initially, I doubted this collaboration. However, with some digging around the NYC private club scene, Erewhon appears to fit right in. The grocery store already has its own star-quality devotees. And in New York, history tells a story. Over the past five years, since the pandemic, membership applications at established clubs like The Union Club (founded 1836) and The Century Association (founded 1847) have surged, while a wave of new private clubs – Zero Bond, Casa Cipriani, Ned NoMad, Casa Tua and Maxime’s – have opened their doors to instant waiting lists. What’s driving this boom? It’s simple: in a city where getting a good reservation feels harder than landing on Mars, private clubs offer something increasingly precious – guaranteed access to exceptional food, hospitality, privacy (most private clubs have strict no photos policies) and being surrounded by your social tribe.

What makes these members-only dining experiences special isn’t just the food – it’s the entire ecosystem. Members can walk into the dining room without a reservation and expect to be seated promptly. The staff knows their preferences, dietary restrictions, and favorite cocktails. It’s personalized hospitality at its finest, something that’s increasingly rare in today’s world. Instead of serving hundreds of diners each night, they’re focusing on a smaller, more intimate membership base. For a price of entry.

Match Made in Membership Heaven

Erewhon’s customer base (celebrities, wellness enthusiasts, affluent health-conscious consumers) directly mirrors private club member demographics. These are people who already spend $200+ on a typical grocery visit without blinking. Like the Erewhon customer, private club members pay for access, exclusivity and the affirmation that they have good taste and style.

Think about the possibilities. An Erewhon partnership could offer club-exclusive products, limited releases, or members-only wellness events with celebrity nutritionists. This mini Erewhon outlet could have at its core the well-instagrammed celebrity smoothies, including Hailey Bieber’s $20 Strawberry Glaze Skin Smoothie and Jasmine Tookes’ $22 Golden Hour Glow Smoothie, that club members could grab after their rooftop padle matches.

From Erewhon’s perspective, partnering with Kith Ivy is reaching a captive, high-spending audience in prime NYC real estate without the overhead of opening standalone stores. For Kith Ivy, it adds another layer of premium amenities that could help justify its membership fees, which reportedly run $7,000 a year for dues on top of a one-time $36,000 initiation fee.

The Gourmet Market Revolution

Here’s where things get really interesting from a food retail perspective. Many of the new private clubs are already incorporating upscale food markets and specialty retail into their offerings. Members can purchase the same high-quality ingredients used in the club’s restaurants to take home – from dry-aged steaks and house-made charcuterie to artisanal cheeses from small-batch producers.

Casa Cipriani, for example, offers members access to premium Italian imports that aren’t available in regular retail – think estate olive oils, aged balsamic vinegars, and specialty pasta from small Italian producers. Zero Bond has partnered with local artisans to offer members exclusive products, from small-batch hot sauces to house-cured salmon. Having Erewhon’s buyers being able to curate and source these offerings not only brings Kith Ivy caché but also relieves the club of a huge burden that frankly most clubs don’t have the expertise to manage.

The Future of Members-Only Retail

As I look ahead, I see this trend continuing to grow. The pandemic taught us the value of intimate, personalized experiences, and private clubs deliver exactly that. They’re also addressing a real pain point in New York’s (and most sophisticated cities) food scene – the difficulty of securing good reservations at top restaurants and the convenience of shopping for unique, trendy foods to bring home.

Private clubs in New York City have evolved far beyond their traditional roots. They’ve become sophisticated food destinations that combine exceptional cuisine, innovative cocktails, and curated retail experiences with the kind of personalized service that’s becoming increasingly rare in our digital age. Erewhon is the perfect food retailer to include in members-only clubs.

Upscale clothing retailers and traditional supermarkets have been struggling for years as the online shopping experience has taken over. Perhaps it’s time to revisit the private club concept and offer membership benefits that are rich and relevant. We need incentives to bring people back into the stores. And we all know membership has its privileges.

7-Eleven New Standard Stores: DOA

Phil Lempert — Thu, 02 Oct 2025 04:01:00 +0000

Japan-based 7-Eleven’s new American CEO, Stephen Dacus, has big dreams. He wants to accelerate the chain’s food offerings, saying “we’ve been moving a bit too slowly” compared to competitors, and plans to open over 600 large-format, food-focused convenience stores with indoor seating by 2027. These New Standard stores will feature expanded food and beverage offerings, in-store seating, and electric vehicle charging stations.

It sounds impressive on paper. But here’s the reality check that Dacus and the Tokyo boardroom seem to be missing. This ambitious makeover is about to crash headlong into the harsh realities of American franchise economics.

Trust between franchisees and their corporate entities is already at an all-time low. The 2021 National Coalition survey of 7-Eleven franchisees found that more than three-quarters of franchisees said they don't trust 7-Eleven.

The Franchise Problem Nobody’s Talking About

7-Eleven operates over 77,000 stores in 19 countries. Currently, about 75 percent of 7-Eleven’s U.S. stores are operated by independent franchisees – that’s roughly 9,750 of the 13,000 stores here. These aren’t corporate-owned showcases where executives can snap their fingers and magically transform a location. These are independently owned businesses where every dollar of renovation comes out of the franchisee’s pocket. According to 7-Eleven’s website, a one-time franchise fee ranges from $50,000 to $75,000, depending on the store you select, before inventory and other opening and operating costs. One important distinction for this business model is that the company shares gross profits with the franchisee, reportedly 50 percent; a more typical royalty payment is based on sales. 7-Eleven also offers up to 65 percent financing on the initial franchise fee and bears the ongoing cost of the land, building, and store equipment. In other words, the company makes it easier and less expensive to become a franchisee than most other C-stores.

7-Eleven estimates these New Standard stores require $1-2 million in investment per site. Think about that for a moment. You’re asking someone who bought into a convenience store franchise for less than $100,000 to suddenly shell out this kind of capital to upgrade their store, and add some tables and a pizza oven? This seems to be a stretch, even though the company has projected that the new store format will increase sales by 13 percent in the first year and 30 percent after four years (don’t forget the company gets half of that!). 7-Eleven released its fiscal 4^th quarter and full-year earnings in April, and it’s estimated that the average store gross sales (depending on location, of course) is between $1 and $2 million in sales before 7-Eleven’s share.

The Economics Don’t Add Up

The recent UK Cinder National Franchise Wellbeing Survey 2025 found that 100 percent of franchisees said running their business has negatively impacted their health and well-being. Add to that, the 2024 International Franchise Association Annual Survey reports that 80 percent of franchisees experienced lower earnings in the previous year, with many struggling to make reasonable profits. These are not entrepreneurs sitting on piles of cash waiting to transform their stores into mini restaurants.

Trust between franchisees and their corporate entities is already at an all-time low, The 2021 National Coalition survey of 7-Eleven franchisees found that more than three-quarters of franchisees said they don’t trust 7-Eleven. Now corporate wants them to bet their financial future on indoor seating and made-to-order pizzas.

Even if franchisees wanted to upgrade and had the money to do so, many simply can’t. Older 7-Eleven locations often are hamstrung by infrastructure issues:

Electrical systems that can’t handle commercial kitchen equipment
Plumbing inadequate for expanded food service
HVAC systems that weren’t designed for dining areas
Parking lots too small for increased dwell time and EV charging stations
Lease restrictions on major modifications

Reality Check

Walk into most American 7-Elevens and you’ll see the problem immediately. Many of these stores are 2,400 square feet or less, crammed into strip malls, urban corners, or gas station lots. The new format stores that Dacus is using as his model feature wine cellars, beer coolers, shared indoor and outdoor seating areas, and separate ordering counters for multiple restaurant concepts. Try fitting that into a 30-year-old store with limited parking in East Oakland, California or Jersey City, New Jersey. It’s not happening.

Here’s what I believe the company fundamentally misunderstands about American convenience store culture: Most C-store customers don’t want to linger. They want to grab their Big Gulp, pay for gas, maybe snag some chips, and get on with their day. While the new format stores are showing higher sales than traditional stores, those are cherry-picked locations in affluent suburbs and not representative of the broader 7-Eleven footprint. Yes, there are other chains like Sheetz and Wawa that have been able to attract customers into their locations by selling fresh foods, but high-quality foods have been in both chains’ DNA right from the start; it’s not a new concept for their customers to adjust to.

In working-class neighborhoods, where a lot of 7-Eleven’s are located, customers aren’t looking for artisanal coffee and hand-tossed pizza. They want convenience, speed, and value. According to Explorer Research, the average time a shopper spends in a C-store is under four minutes. Adding seating areas to stores that serve these communities is like putting a wine bar in a bus station – it misses the point entirely.

Dacus admits that competitors have moved faster in food, but he’s fighting the wrong battle. Wawa, Sheetz, and QuikTrip succeeded with food because they built their concepts from the ground up with company-owned stores and consistent execution. They didn’t try to retrofit decades-old franchise locations.

The Only Viable Path: Corporate-Owned Expansion

In my opinion, there is only one way that Dacus’s vision could work: 7-Eleven corporate builds, owns, and operates these New Standard stores themselves; it’s the only economically rational approach. 7-Eleven has done this before. When they acquired Speedway’s 3,800 stores from Marathon Petroleum in 2021 for $21 billion, many came as company-operated locations. They’ve shown they’re willing to make massive capital investments when the returns justify it.

According to the National Coalition of Associations of 7-Eleven Franchisees (representing over 4,400 stores), the number of company-owned locations through acquisitions is now more than 4,400, and the percentage of franchised stores now stands at 60 percent. So, here’s where it gets interesting – and potentially explosive for franchise relationships. If 7-Eleven proceeds with corporate-owned New Standard stores while leaving franchisees with aging traditional formats, they’re essentially creating a two-tier caste system that could destroy the franchise model entirely.

Picture this scenario: Corporate opens a gleaming New Standard store with indoor seating, electric vehicle charging, and made-to-order food three miles from local Joe’s franchise location that’s been serving the community for 20 years. Joe’s store, with its cramped aisles and roller grill hot dogs, suddenly looks like yesterday’s news. Corporate gets the prime real estate, the marketing buzz, and the higher margins, while Joe watches his customer base erode. Spoiler alert: As a corporate store, 7-Eleven keeps 100%.

This is not a hypothetical concern. 7-Eleven’s own investor presentation shows these New Standard stores are delivering higher sales than their store predecessors. When corporate can achieve those returns with its own investment, why would it want to split profits with franchisees? This approach lets 7-Eleven have it both ways – stable income from existing franchises while capturing higher returns from growth markets. But it also fundamentally changes the franchise value proposition from partnership to managed extinction.

Existing franchisees face an impossible choice: invest heavily in upgrades they might not be able to afford to compete with corporate, or watch their businesses slowly become irrelevant as 7-Eleven’s marketing and development focus shifts to the New Standard format. Some franchisees might welcome the opportunity to sell their locations to corporate for conversion. Others will fight to protect their territories. Either way, the current franchise model is unsustainable once corporate starts cherry-picking the best markets for their own high-investment stores.

The Bottom Line

Dacus’s vision isn’t wrong – it’s just incompatible with the franchise model that built 7-Eleven’s American presence. The company has three choices: abandon the New Standard concept, force financially struggling franchisees to somehow fund major renovations, or proceed with corporate-owned expansion that could trigger the end of 7-Eleven franchising as we know it.

My prediction? They’ll choose door number three. The returns are too attractive, the franchisee relationships are already strained, and the company needs growth to justify its valuation amid the takeover failure from Alimentation Couche-Tard. The successful New Standard stores will probably be located in affluent markets. The franchise stores will continue serving their communities until their leases expire or corporate decides those locations are worth converting and buying them out.

Is it evolution or annihilation?