Inflation runs hot, and so do the winners. Costco, Aritzia and Uniqlo keep pulling away while LVMH stumbles and Kroger and Albertsons struggle to escape grocery’s mushy middle. Then Wayfair President Jon Blotner explains why a two-decade online pure play is betting on 150,000-square-foot stores, how merchants narrow a catalogue of millions to one floor, and what the store halo is really delivering.
Steve Dennis is back from Athens, where he keynoted on the soul of the store and walked the Ancient Agora, one of the world’s first marketplaces. He and Michael LeBlanc open with a hotter-than-expected U.S. inflation report: consumer prices up 3.7%, producer prices up 6.3%. How much have retailers been absorbing, and what happens when elevated diesel costs work through the food chain into 2027? The winners keep winning anyway. Costco posted a 7.6% comp excluding gas on 4.7% traffic growth. Aritzia delivered a 34.5% comp with digital up nearly 70%. Uniqlo logged its fifth straight record year. LVMH did not, with fashion and leather goods down 5%. The hosts also size up Amazon’s new Bee wearables and Apple’s new home device.
The featured conversation is with Jon Blotner, President of Wayfair, who runs merchandising, marketing, physical retail and global logistics. After two decades as a pure play, Wayfair has gone from a small test store in the Natick Mall to a 150,000-square-foot flagship outside Chicago. Atlanta and Columbus are open, Denver arrives by year-end, and six more stores are planned through 2028. The early returns are hard to ignore. Illinois sales are growing 15% faster than the rest of the U.S., roughly half of Chicago store shoppers are new to Wayfair, and opening-day crowds included shoppers who bused in from Wisconsin. Landlords noticed.
Jon explains why a showroom model didn’t fit, how the Wayfair Verified program brings merchant discipline to deciding what earns floor space, and how associates with tablets connect shoppers to the endless aisle and two-day delivery. He takes on Michael’s question of whether rent is the new customer acquisition cost, and explains why he expects store shoppers to deliver meaningfully higher lifetime value. He also covers four-wall profitability, falling opening costs, the roles of AllModern, Birch Lane, Joss & Main, Perigold and Wayfair Professional, and Wayfair’s ambitions for Canada. He closes with advice for digital brands going physical, starting with why a store test demands far more planning than an online one.
After the interview, Steve, a longtime Wayfair skeptic, gives his updated take. Then the hosts turn to grocery’s mushy middle. Kroger posted flat sales excluding fuel and cut guidance, Albertsons slipped 1% and withdrew guidance, and the hosts ask whether online grocery and retail media are really additive. They close with their radar screen picks, including the US midterms and the Weston family’s purchase of Boots.