AlixPartners Says Global Retailers Must Focus on What They Can Control Amid a 2026 “Permacrisis”

Global consulting firm AlixPartners said in its “2026 Global Retail Outlook” report that retailers will remain caught in a “permacrisis” in 2026, with tariff policy and geopolitical conflicts still highly uncertain. Under these conditions, decisive management decisions will be difficult, making it essential for retailers to concentrate resources on areas they can control. The report analyzes key variables and sets out scenarios for the five largest transformations retailers may face in 2026. First is the progress of agentic AI. According to AlixPartners’ 2026 Disruption Report, only 32% of executives at retail and consumer goods companies said their AI programs were highly mature. Most AI investment currently remains focused on back-office operations such as inventory management and demand forecasting, while use cases for improving customer experience remain limited. Agentic AI will continue to attract attention this year, but its full industry-wide impact is not expected to become visible until around 2030. By then, companies with strengths in efficiency and supply chains may gain an advantage through AI, while companies dependent on emotional connection and upselling may face declining price competitiveness. AI adoption is also shifting toward short-term pilots, such as time-limited implementations of price optimization tools, while large-scale system investments with complex ROI profiles are declining. Second is e-commerce growth and the reassessment of physical stores. Omnichannel strategies have centered on delivering products faster and more cheaply, but the e-commerce share rose only 0.2 percentage points, from 16.2% to 16.4%, between Q3 2024 and Q3 2025. As Amazon shifts from a price-competition model toward experience-led formats such as Whole Foods, 2026 is expected to be a year in which the experiential value of physical stores is reevaluated and competition for store share intensifies. According to AlixPartners’ 2026 Supermarket Consumer Report, value-oriented customers choosing private labels increased from 32% to 47%. Trader Joe’s, Aldi, and Lidl are expanding foot traffic through private labels and “treasure hunt” shopping experiences. Third is investment in experiential stores under capital constraints. Retail real estate has stabilized since 2025, but inflation and changes in consumer behavior are constraining retailers’ shift toward long-term, capital-intensive strategies. Experiential stores often require three to five years to become profitable on a standalone basis. Luxury players, major food companies, and highly profitable digitally native brands can invest in flagship stores, but capital raising is more difficult for mid-sized apparel companies and department stores. AlixPartners’ 2026 Disruption Index Report found that 70% of executives are concerned about protectionism and trade risks, and are prioritizing investments in nearshoring, supplier diversification, AI-enabled visibility, and last-mile efficiency. These investments directly compete with funding for experiential stores, making trade-offs unavoidable. As a result, many companies are expected to focus on limited initiatives such as pilot stores, short-term leases, pop-ups, and modular experiential formats rather than full-scale transformation. Fourth, inflation will affect M&A and capital policy. In 2026, organic growth is expected to remain difficult, increasing expectations for inorganic growth through M&A, joint ventures, and special purpose vehicles. The inflation outlook will strongly influence capital costs and whether deals can be completed. If inflation moderates, M&A and asset optimization are expected to advance. If inflation remains elevated, transactions will become more difficult, increasing the importance of financial restructuring and balance sheet flexibility. Fifth is a change in M&A strategy. In addition to the traditional retail M&A model of entering new regions, expanding into new categories, or acquiring more physical assets, AlixPartners expects a new approach to spread in 2026: acquiring only good assets while avoiding bad ones. In the value retail segment, companies such as ALDI are increasing share by narrowing their product assortments. Traditional approaches such as Chapter 11 bankruptcy have become less effective at improving the long-term health of distressed companies. Kyota Egawa, partner at AlixPartners and leader of its consumer goods and retail practice in Japan, said 2026 will bring the largest disruptions to the retail industry, with tariff policy and geopolitical risks making the outlook increasingly difficult to predict. To survive and establish competitive advantage, companies must reinforce retail fundamentals such as strengthening supply chains and improving productivity, while building organizations that can respond flexibly and quickly to rapid changes in markets and consumers. Investments in AI and experiential stores, as well as revisions to capital policy and M&A strategy under inflationary conditions, are significantly reshaping the industry structure. Companies able to respond quickly through limited pilot investments and agile business portfolio optimization will clearly separate themselves from slower-moving competitors. The appendix discusses what these trends mean for Japan’s retail sector, which faces structural challenges including market contraction from population decline, rising labor and raw material costs, and rapid technological evolution. Compared with the United States, Japan’s AI use remains focused on operational efficiency rather than customer experience. Major U.S. players such as Amazon and Walmart are investing in proprietary customer-facing AI to strengthen engagement, while Japanese retailers are prioritizing AI for operational efficiency because of labor shortages, rising personnel costs, and pressure to improve profitability. One area with significant potential for AI in Japan is improving decentralized decision-making. Decision-making in Japanese retail is structurally highly distributed, spanning marketing, inventory, warehousing and logistics, promotions, pricing, store portfolios, and store-level decisions such as shelf allocation, ordering, discounting, shift scheduling, and sales floor layout. Many of these decisions still depend on frontline experience and intuition rather than systematic data. Using AI to make these formerly person-dependent decisions more data-driven could have a major impact on bottom-line profitability. Generative AI will also be important because it allows AI to be controlled through natural language, lowering the barrier for users with limited technical literacy and helping connect systems with different protocols across manufacturers, wholesalers, logistics providers, and retailers. As population decline shrinks the Japanese market, retailers must reconsider where to find new sources of earnings and where to allocate capital. They need to identify which areas create value and which areas should be abandoned, including withdrawal from non-core businesses. The report divides Japanese retailers into three categories: diversified large corporate groups that support broader consumer lifestyles and are expected to streamline portfolios by divesting non-core businesses; specialized scaled retailers that will continue investing in areas that strengthen their advantages and support global expansion; and small to mid-sized players that may struggle to survive independently and become candidates for joining major platforms or restructuring around specific functional strengths. For M&A in Japan, the report expects industry restructuring to accelerate as selection and focus become more important. Three waves are likely: carve-outs and sales of non-core businesses, roll-up consolidation of smaller peers by financially stronger companies, and acquisitions by foreign investors. Under a weaker yen, Japanese companies are attractive targets for overseas investors, especially private equity funds. These trends will further widen the gap between financially healthy companies with investment capacity and those without it.