• by Maarten Albarda , Featured Contributor, July 25, 2025

I’m sure you have followed the news about the challenges facing Kraft Heinz, as reported over the last few weeks. The company is not alone: We see once-successful retailers and restaurant chains fighting for survival. Hooters, Red Lobster, Applebee's & IHOP (Dine Brands), Denny's, Red Robin and Boston Market are all in various stages of near- or complete bankruptcy. Stores like Macy's, CVS Health, Foot Locker, 7-Eleven and Family Dollar / Dollar Tree have all announced store restructuring plans (meaning: store closures), while China-based ecommerce giants Shein and Temu are feeling the effects of tariff uncertainty.

While the economy is still being reported as “resilient,” there are cracks in U.S. economic performance indicators: Inflation is creeping back up, unemployment is flat, but job growth is negative.

The traditional moats that once protected businesses are deteriorating or gone. Trusted and established brand GOATS are no longer safe. American consumers are actively changing their purchasing behaviors.

A June 2025 report from KPMG noted that 94% of consumers continue to feel the pressure of inflation, with 76% stating their cost of living has increased by more than 5%. This has led to a direct reallocation of household budgets, with a greater share of income going toward essentials.

Categories such as dining out, travel, entertainment, and luxury goods have been the first to feel the pain. In contrast, spending on essential categories like groceries and automotive needs remains more stable -- though this is often driven by manufacturers benefiting from price increases rather than increased consumption.

One of the most significant and potentially permanent changes in consumer behavior is the accelerated shift away from established national brands to private-label or store brands. Consumers now perceive store brands as offering comparable or even superior value. A report from Bazaarvoice highlighted an 11-percentage-point surge in shoppers permanently opting for private labels compared to the previous year, with 76% citing lower prices as the primary motivator.

This is bad news for marketers in charge of any kind of brand. More than ever before, a brand must be the sum of every interaction, from ingredient lists to manufacturing credentials to social media presence.

If your brand relies on having a physical footprint, you must answer the question: "Why would someone leave their house for this?" If your only answer is "to buy something," or “to discover or find my brand,” you're in a losing battle. Marketing integration must extend into operations and experience design to create a compelling, in-person value proposition. And even then, you must have an equally strong online game.

Still, the recent struggles in the D2C and online retail space prove that digital is not a magic bullet. For years, the moat was thought to be cheap customer acquisition via social media ads. But that channel has become expensive -- and saturated with AI. The cost to acquire a customer has skyrocketed, and the "growth at all costs" model has collapsed.

Digital is a channel, not a strategy. The fundamental rules of business still apply, which is both reassuring and challenging. You still need a strong product, a viable path to profitability, and a reason for customers to return for repeat purchases.

Here’s a shocker: You need to build a strong brand with enough differentiation to make it viable even when the going gets tough.