2026 Retail Outlook: Where Smart Bets Will Pay Off

Credit: Getty Images by SolStock

By Nick Bolter, Allison Gargano, Carrie Gonell, Aliza Karetnick, Melissa Rodriguez, and Dan Salemi

As retailers and investors therein plan for 2026, the big picture matters. Expect continued attention to inflation, interest rates, and consumer confidence as each will shape pricing, inventory strategies, and capital allocation.

IP Essentials: Protect the Brand

A brand can be a company’s lifeline — it must be instantly recognizable and consistent across stores, marketplaces and social channels. Treat omnichannel distinctiveness as a core operating principle, not a nice‑to‑have.

• Keep your trademark portfolio clean: audit current marks, shore up international filings to support cross‑border e‑commerce, and utilize trademark watch services to spot brand misuse early.

• Build and practice an enforcement playbook, which might include using notice‑and‑takedown tools, enrolling in e‑commerce platform brand registries, and establishing clear escalation paths when issues persist.

Counterfeiting and gray‑market risks will continue to rise with third‑party marketplace growth. Pair authentication technology and serialization with smart monitoring to deter fakes before they spread. When needed, keep litigation and customs actions ready to protect high‑velocity SKUs and seasonal drops.

Private Equity: Capital With a Playbook

We anticipate that private equity will remain active in the retail investment space where funds see a blueprint for value creation. Several themes have emerged, including supply‑chain optimization (e.g., inventory and working capital), monetizing loyalty and first‑party data responsibly, and focusing on private‑label portfolios. Investors will seek to capitalize on these opportunities through a range of acquisition structures, from carve‑outs of non‑core divisions, roll‑ups in fragmented niches, and growth capital to PIPEs for public retailers seeking flexibility without full takeovers.

Growth is likely to concentrate on resilient segments: specialty and premium concepts, experiential formats, health/beauty and wellness, and discount banners that thrive on value. Investors will also focus on consolidation among digital‑native brands and a smarter store footprint — rationalized networks paired with high‑return‑on‑investment flagships and pop‑ups that drive discovery and community.

Labor, Employment and Benefits: Build a Resilient Workforce

We expect regulatory movement and enforcement actions at the state level on wage and hour issues, including predictive scheduling, rounding, and worker classification, as well as on restrictive covenants, particularly for multistate employers subject to different state regulatory requirements.

For compliance, employers should:

• Update multistate handbooks to capture state/local nuances.

• Review arbitration and class‑action waiver strategies where permissible.

• Audit worker classification, rounding and other time‑keeping practices.

• Tighten vendor management for gig and third‑party delivery to reduce joint‑employer and co‑employment risk.

Union organizing efforts will continue to expand, including into non‑traditional retail employee ranks, and will remain a factor in distribution and fulfillment. Employers should invest in manager training, communication, and compliance readiness.

Automation Will Continue to Reshape Teams

As self‑checkout, robotics, and other AI‑assisted services change role design and staffing models, employers should plan for a blended workforce. Make retraining and reskilling standard, support change management, and ensure ADA accommodations are built into tech‑enabled roles. Don’t overlook health and safety for back‑of‑house automation and battery‑charging environments.

Benefits are a differentiator in a tight labor market. Employers will likely expand mental‑health support, flexible scheduling where operations allow, and variable pay or equity (or phantom equity) for store and distribution‑center leaders, with retention bonuses tied to clear key‑performance indicators.

Specialty Retail Spotlight: Cosmetics

Beauty continues to punch above its weight across all sectors, including luxury and celebrity brands, largely fueled by social commerce. Cross‑border demand and the recovery of travel retail add tailwinds. While fast R&D cycles matter, speed cannot come at the expense of solid claims substantiation.

Competition is fierce — indie brand roll‑ups, private‑label gains, and retailer‑owned brands — but companies must stay current on evolving cosmetics regulations, including ingredient‑disclosure requirements and adverse‑event reporting. Marketing must then meet the moment: manage endorsements, testimonials, and controls around AI‑generated content to maintain a competitive edge without becoming the subject of unwanted scrutiny.

The 2026 Playbook

Companies that adopt simple but effective best practices can and will succeed. Success will come from disciplined IP enforcement, strategic capital deployment, tech‑enabled and resilient workforces, and focused bets in specialty categories that align with customer demand. Helpful guidance:

• Refresh IP portfolios and marketplace enforcement.

• Keep PE‑ready diligence files.

• Complete labor‑compliance audits and upskilling plans.

• Pilot specialty concepts with strong claims support and regulatory readiness.

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Author Bios

Nick Bolter – Intellectual property partner focusing on trademarks and designs; managing partner for the firm’s London office. Represents clients in selection, prosecution, protection, and enforcement of trademarks, brands, and designs in the UK and across Europe. Recognized in World Trademark Review WTR1000 2020 as a top trademark professional.

Allison Gargano – Advises private‑equity sponsors, family offices, and portfolio companies on US and cross‑border transactions, leveraged buyouts, growth equity, carve‑outs, co‑investments, and strategic exits. Co‑leader of the firm’s global private‑equity initiative and retail/e‑commerce industry team; pro‑bono chair for the New York office.

Carrie Gonell – Litigation and strategic counseling partner with over two decades of experience. Focuses on class, collective, and representative suits in financial services, retail, technology, and airline industries. Advises on wage‑and‑hour compliance, manages audits, and leads the firm’s retail/e‑commerce industry team. Active pro‑bono practitioner in immigration and family‑rights matters.

Aliza Karetnick – Litigation partner representing clients in high‑stakes commercial matters and class actions across manufacturing, personal‑care, food‑and‑beverage, and financial sectors. Serves as special master for the Eastern District of Pennsylvania and leads crisis‑management teams.

Melissa Rodriguez – Advises on the full spectrum of labor and employment law, including litigation, counseling, and internal investigations. Represents employers in federal and state courts, administrative agencies, and arbitration forums. Experienced in FLSA, ADA, ADEA, FMLA, and numerous state labor statutes.

Dan Salemi – Deputy practice‑group leader for global employee benefits and executive compensation. Counsels on retirement plans, health and welfare plans, fiduciary governance, and equity‑based compensation. Serves on Institutional Investor’s Defined Contribution Institute Advisory Board.

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The authors are partners with Morgan Lewis & Bockius and co‑leaders of the firm’s Retail and E‑Commerce team.