Amazon cut 16,000 jobs Tuesday. Home Depot cut 800 on Wednesday. Nike is eliminating 775 at distribution centers. Pinterest is letting go of 700 (15% of its workforce) to fund AI projects. In a single week, more than 33,000 retail-adjacent roles disappeared. The stated reason in nearly every announcement: automation, AI, or "removing bureaucracy."
Meanwhile, consumer confidence collapsed to its lowest point since 2014. The Expectations Index fell to 65.1, well below the 80-point threshold that has historically signaled recession within 12 months. Yet Michigan Sentiment rose slightly. Retail sales remain positive. I find myself thinking about what this divergence means: companies are positioning for a future they expect to arrive faster than the consumer surveys suggest.
33,000+
Amazon
16,000
Home Depot
800
Nike
775
Pinterest
"to fund AI projects"
700
Measurable
2x Conversion
Lowe's Mylow AI users
+200bp CSAT
When associates use AI
40x Growth
Amazon perishable delivery
None of these companies cited sales declines. All cited automation economics.
One Week Total
33,000+
Retail-adjacent jobs
Amazon's Share
48%
16,000 of total cuts
Pinterest Cut
15%
Of entire workforce
The signal: Companies aren't cutting because sales fell. They're cutting because AI ROI crossed the threshold where every role must justify itself against an algorithm.
Sources: Company announcements, Lowe's earnings reports (January 2026)
ECONOMIC PULSE (Week of Jan 29, 2026)
Redbook Index: +5.7% YoY (week ending Jan 20) down from 7.1% prior week
Consumer Confidence: 84.5 (January) 12-year low, expectations at 65.1
Michigan Sentiment: 56.4 (January final) up from 52.9 in December
Fed Rate: 3.5%-3.75% (held steady Wednesday)
Food CPI: +3.1% YoY (December), coffee and tea up 11.8%
Sources: FRED, Conference Board, University of Michigan, Federal Reserve, BLS
The Layoff Cascade
The numbers from this week's announcements are staggering in their concentration. Amazon's 16,000 cuts affect nearly 1 in 10 corporate workers, the company's second mass layoff since October when it eliminated 14,000 roles. Beth Galetti, Amazon's SVP of People Experience, said the company is working to "strengthen our organization by reducing layers, increasing ownership and removing bureaucracy."
Home Depot's 800 cuts came Wednesday, concentrated in its technology organization. CEO Ted Decker's memo cited the need to "increase our speed and agility." Most of the affected employees were remote; the remaining corporate workforce will return to offices five days a week starting April 6.
Nike's 775 distribution center cuts in Tennessee and Mississippi accelerate the company's automation strategy. The company said it's working to "reduce complexity, improve flexibility, and build a more responsive, resilient, responsible, and efficient operation." This marks Nike's third consecutive year of layoffs.
What strikes me about these announcements: none of them blame slowing sales. Pinterest explicitly stated it's cutting 700 roles to "reallocate resources" toward AI projects. That's not crisis management. That's a bet on where the efficiency gains are heading.
What this means: Corporate headcount is no longer a growth metric. Companies are measuring efficiency against automation potential, not against last year's org chart. For site selection, watch how these layoffs ripple through secondary markets where distribution centers and corporate offices anchor commercial real estate.
Amazon's Grocery Retreat
Amazon will close all 72 of its Amazon-branded grocery stores, including every Amazon Fresh and Amazon Go location. The company acknowledged it hadn't created "a truly distinctive customer experience with the right economic model needed for large-scale expansion."
Amazon Go was a Jeff Bezos pet project. The "Just Walk Out" technology, cameras tracking items, automatic checkout, no cashiers. It debuted in 2018 to breathless coverage about the future of retail. Amazon Fresh launched in 2020 targeting mass-market grocery shoppers, expanded rapidly, then retrenched through multiple strategy pivots. Eight years of experimentation, and the conclusion is: it didn't work.
The retreat comes with an aggressive counter-move. Amazon will open more than 100 new Whole Foods stores over the next few years and expand its small-format Whole Foods Daily Shop to 10 locations by end of 2026. Perishable grocery delivery sales have grown 40x since January 2025, and fresh groceries now account for nine of the top 10 most-ordered items where same-day delivery is available.
Shutting Down
Amazon Fresh
Mass-market grocery
~50
Amazon Go
Just Walk Out tech
~22
"We hadn't created a truly distinctive customer experience"
Scaling Up
Whole Foods
Premium grocery
100+
Daily Shop
Small format by 2026
10
"Premium + delivery is the future"
Perishable grocery delivery grew 40x since January 2025
Experiment Duration
8 Years
Amazon Go launched 2018
New Whole Foods
100+
Planned over next few years
Also Ending
Palm Pay
Amazon One removed by June
The signal: Amazon's discount grocery experiment ended. Premium + delivery won. The 72 closures create repositioning opportunities in markets where Fresh held premium locations.
Sources: Amazon company announcement, aboutamazon.com (January 2026)
Amazon also announced it will remove all palm payment readers from physical stores by June 3, ending the Amazon One biometric payment experiment.
What this means: The 72 closures create repositioning opportunities in markets where Amazon Fresh occupied premium grocery locations. Watch conversion announcements. Some will become Whole Foods; others will hit the market. For tenants, Amazon's retreat validates the difficulty of competing in grocery without an existing brand loyalty advantage.
Confidence Craters, Expectations Collapse
The Conference Board's Consumer Confidence Index dropped 9.7 points to 84.5 in January, the lowest reading since May 2014. Chief economist Dana Peterson said "confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened."
The Expectations Index fell to 65.1, well below the 80-point threshold that has historically signaled recession within 12 months. All five components of the index deteriorated. Consumers' views of current business conditions worsened: only 17.9% said conditions were "good," down from 19.8% in December.
University of Michigan Sentiment tells a different story. The final January reading came in at 56.4, up from 52.9 in December. The improvement was broad-based across income levels, age groups, and political affiliations. Year-ahead inflation expectations declined to 4.0%, the lowest since January 2025.
Below 80 = recession risk
12-year low. All 5 components deteriorated.
Up from 52.9 in December
Improvement across income levels and age groups.
The Divergence
Conference Board collapsed
while
Michigan improved
— same consumers, opposite signals
Redbook Sales
+5.7%
YoY (still positive)
Fed Rate
3.5%
Held steady Wednesday
Inflation Expectations
4.0%
Lowest since Jan 2025
The signal: Expectations Index below 80 has historically signaled recession within 12 months. But Michigan improved and spending continues. Which indicator breaks first?
Sources: Conference Board, University of Michigan, Federal Reserve (January 2026)
About 45% of consumers spontaneously mentioned that high prices were eroding their living standards, compared with 34% a year ago. The purchasing power complaint is persistent even as overall sentiment improves.
The Federal Reserve held rates steady at 3.5%-3.75% on Wednesday, pausing after three consecutive quarter-point cuts. Chair Powell said he expects tariff-related inflation to "top out" by mid-2026.
What this means: The divergence between Conference Board and Michigan measures suggests consumers are anxious about the future but not frozen in the present. For expansion planning, the Expectations Index below 80 warrants caution. For market analysis, watch purchasing power complaints translate into format and category preferences.
Retail Contraction Continues
Francesca's is liquidating all 450+ stores across 45 states after receiving a notice of default from its lender on January 8. The company cited a "sudden and unforeseen series of events" including an investor who withdrew promised operating funds and lenders who terminated funding for two major suppliers. One vendor told Women's Wear Daily that Francesca's owes approximately $250 million in unpaid invoices.
Allbirds announced it will close all remaining U.S. full-price stores by end of February, leaving only two outlet locations in the country. The footwear retailer operated more than 60 stores at its peak in 2023. Its market cap has fallen to $32 million, down more than 80% over the past two years. Allbirds plans to expand into 150 specialty retail stores through third-party partners by spring 2026.
I keep coming back to the timing. These are companies that expanded aggressively during the post-pandemic period. Cheap capital, pent-up demand, DTC hype. Now the capital environment changed. The consumer shifted. What made sense in 2021 looks expensive in 2026.
What this means: Francesca's 450 locations and Allbirds' stores will hit the market in a concentrated window. For portfolio managers tracking small-box inline retail, assess exposure to "elevated basics" and fashion-forward concepts. The DTC-to-retail pipeline that drove mall traffic projections in 2022-2023 is reversing.
AI Shows Measurable Returns
The layoff announcements frame AI as a cost story. The deployment data tells a different one. Lowe's reports that customers who engage with its Mylow AI assistant convert at more than twice the rate of those who don't. When associates use the in-store version, customer satisfaction scores increase by 200 basis points.
Vitamin Shoppe opened an "Innovation Store" on New York's Upper East Side with an AI-powered advisor that answers supplement questions and checks inventory in real time. PVH Corp partnered with OpenAI to build custom AI into Calvin Klein and Tommy Hilfiger operations, from product design to demand planning to inventory.
Here's the part that gets me: AI is simultaneously eliminating back-office roles and driving measurable conversion gains on the customer-facing side. Lowe's 2x conversion. Vitamin Shoppe's personalization. PVH's demand planning. The companies spending the most on AI are seeing returns that justify spending even more. That flywheel is spinning up.
What this means: AI deployment is becoming table stakes, not a differentiator. For tenant evaluation, ask what AI investments are planned. Retailers without an AI roadmap in 2026 are the ones to watch carefully, and not in a good way.
Expansion Signals
Target is rolling out its largest spring beauty assortment ever, with approximately 3,000 new products from more than 60 new brands including Supergoop and Morphe. Over 90% of products are priced under $20. The expansion comes as Target prepares for the August 2026 end of its Ulta shop-in-shop partnership.
Dollar General expanded same-day delivery to more than 17,000 stores, concentrating on underserved rural areas. BJ's Wholesale Club is opening its second small-format "Market" store, about half the size of traditional club locations, focused on grocery.
Traditional grocers are adapting their value messaging. AlixPartners research found that supermarket operators depend too heavily on promotions to connect with customers, leading to unfavorable comparisons with discount and club channels. The "low price" message no longer resonates when consumers see Walmart and Aldi prices daily.
The K-beauty wave continues. Target's expansion includes its largest K-beauty selection yet, with brands like Dasique, I'm Meme, and haruharu wonder. Sephora has already announced K-beauty partnerships for later in 2026.
What this means: The money is going into value formats, beauty, and delivery. Target's post-Ulta beauty strategy is worth watching as a bellwether. Dollar General's rural delivery push is quietly changing convenience expectations in markets that e-commerce forgot.
Looking Ahead
I'll be honest: this week's data feels different. The companies cutting jobs aren't doing so because sales collapsed. They're doing so because automation economics crossed a threshold where every human role needs to justify itself against an algorithmic alternative. Amazon's grocery retreat. Nike's distribution automation. Pinterest's explicit AI reallocation. Four announcements, same logic, same week. That concentration tells you something about where the industry thinks it's going.
Consumer confidence at a 12-year low with Expectations below the recession threshold creates a watchful environment. But Michigan Sentiment rose, retail sales remain positive, and companies continue investing in growth categories. The sentiment-behavior gap from last week persists.
Key dates ahead: January retail sales data arrives February 14. Q4 earnings continue through February. The next Fed meeting is March 18-19, where markets expect rates to hold steady again.
For site selection, this week offers a clear framework: follow the consolidation. Francesca's 450 stores, Allbirds' locations, and Amazon's 72 grocery stores create repositioning opportunities. Track where Whole Foods conversions land, which distribution centers Nike keeps, and how the layoff-heavy metro areas absorb displaced workers. The closures this week become the leasing opportunities of Q2.