As you know, we're big fans of the rapidly reorganizing consumer economy here at Sunstone Capital. Though admittedly some of it makes us very nostalgic (I loooved Toys "R" Us *sniff*).
What's interesting to see is the very clear shift in the offline retail word towards discount/utilitarian. See the expansion of Dollar General below. Quoting from our DTC thesis:
...consumer preferences seem to be fragmenting. The large, homogeneous Western middle class which was the mainstay of consumer packaged goods (CPG) brands has split in two. At the bottom end, private labels are booming, with consumers increasingly utilitarian and looking for value. At the top, the preference is for quality, authenticity, and meaning - with tastes skewing small and independent. Large CPG brands are being squeezed in the middle.
...Big is less and less better. Previously, brand scale conferred huge advantages in pricing power, margins, access to supply chain, and retail ubiquity. No longer. An economically, commercially, and environmentally more literate and conscious consumer increasingly distrusts big brands. Emerging affluent tastes are natural and organic, while the poor or disillusioned prefer the honesty of unbranded commodity.
We think this is only the beginning - retail is poised to keep changing over the next decade.