Fiscal Q2 results showed a markedly better pace of sales for off-price, led by Burlington (as we had previewed ). The gains were on a 1-, 2-, and 3- year basis as the table below demonstrates. Additionally, off-price’s acceleration wasn’t to the detriment of legacy department stores. If off-price was experiencing a big trade-down benefit, it would hit legacy department stores hard given that the three are 50% larger, in aggregate, than the legacy names.

To say the least, the dollar stores had a difficult 2023 and ’24, and best signified by 99C Only going away and new leadership being appointed at Dollar General, Dollar Tree, Family Dollar, and Five Below. With the new leadership teams, each pivoted to a “back-to-basics” strategy, or as we like to say, “retail is detail.” Well the details are being done right given the strengthening traffic and even better comp-sales results.

This week brought a lot of news about Aldi’s expansion, including 200 new locations by year-end, half from new openings and half from converting the acquired Winn-Dixie stores. Next year is to bring another round of new openings and around 120 Winn-Dixie / Harvey conversions. Florida is winning / experiencing the most with 50 (mostly conversions), giving residents a greater selection of strong grocers to choose from. As of August, Aldi had 268 locations in Florida, with Orlando its biggest market at 70 locations.

Follower Friday’s note on Walmart US’ Q2 results, here we dissect Sam’s Club quarter with a compare / contrast to BJ’s Wholesale and Costco, while also reflecting on Target. The table below shows the top-line KPIs for the four. Costco’s comp-sales and comp-transaction outperformance is notable; as readers will know, that outperformance stems from its strong private brand offering, the Costco member’s high affluence, and our “thrifty K-shaped economy” and consumer mood.

Thirteen years ago, when the lower-income and moderate consumer was under a lot of economic and budgetary strain, and Walmart was less “considered” by more affluent households, the US business was only able to deliver a +0.5% comp-sales increase (2011- 2014) and WMT’s valuation multiple was only 13X (price-to-earnings). Since then Walmart (and Sam’s) has gone through a “contemporization” of increased enhanced / enriched merchandise assortment, increased convenience (curbside, store delivery, in-stocks, .

Finally! Housing-related retail categories are experiencing some wind in their sales. Two weeks ago, we wrote about mattress and furniture retail reporting on better demand, which we took to be more of a backwards look than a forward look with the reasoning be that it was due to tariff pull forward; however, with Home Depot and **Lowe’s **reporting excellent sales results in July and observed traffic (Advan) in August looking especially robust (+5% YoY MTD), we are going to modify our earlier viewpoint to say that the macro and demand is now improving for housing-related retail.

With Medtronic’s fiscal Q1 quarterly results came the news that two new independent directors had been added to the Board and after Elliott Investment Management became one of its largest shareholders. The WSJ reported , “The activist investor and the medical-device maker have been holding friendly talks around how to boost the company’s valuation and build on ongoing plans to focus on core assets.” Notable from the earnings call, was management’s aim to accelerate top-line growth for the remainder of the fiscal year and beyond, which was one of the “asks” by Elliot per CNBC.

With fiscal Q2 earnings, Target announced that Chief Operating Officer Michael Fiddelke will succeed Brian Cornell as CEO, effective February 1st, 2026. When asked what they were seeing as evidence that the business was improving, Fiddelke said that they were seeing “pockets of green shoots,” but “we need to turn those into a field of green shoots. And that’s where the teams are focused. We need to make sure the experience pays off the expectations that our guests have.

Following the jilted tie-up between 7-Eleven (Seven & I Holdings) and Circle K (Alimentation Couche-Tard), Seven & I updated investors on its growth strategy. (Here we will speak solely of the US business. Additionally, the IPO plans for the US remain.) The strategy includes expanding its private label food offering and quality to raise consumer perceptions in regards to distinctiveness, “taste,” and value, but especially as it relates to fresh and prepared meals.

As previewed , July retail sales accelerated from June’s slower pace due to: first, a strong and early start to back-to-school, second, less disruptive weather, and third, a lessening of consumer uncertainty about inflation, as shown in the chart below. (The New York Fed’s survey also showed that expectations for the rate of inflation 1-year out also dropped for those with a household income above $100K). We suspect that the first was the largest factor, and as such, underlying retail sales should slow (ex.