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Frito-Lay on the upswing as convenience store visits improve

Frito-Lay on the upswing as convenience store visits improve

We wrote an insights piece two weeks ago about the improving traffic into convenience and gas station stores (C&G), specifically from the pump pad into the store, and noted that it was a favorable development for CPG suppliers as well as the major operators, Casey’s Stores, Chevron, 7-Eleven, and Circle-K, etc. Today brought Pepsi’s Q2 earnings results, and lo and behold, the trend improved for Frito-Lay’s savory snacks business (Doritos, Tostitos, Lay’s, Fritos, etc.
2 minutes
Target’s Expansion Into Growth Mode Despite the Noise

Target’s Expansion Into Growth Mode Despite the Noise

Two months ago, we reviewed Target’s fiscal 1st quarter results, and before that, the news that they would be accelerating the store opening pace to 30 per year. Since then, the false narrative that boycotts following DEI policy changes were leading to severe traffic declines, along with growing media scrutiny of management’s decisions, including from CNBC with the title – **“Lost their identity: Why Target is struggling to win over shoppers and investors.
5 minutes
Albertsons Companies – More price investments ahead to rebuild share-of-stomach

Albertsons Companies – More price investments ahead to rebuild share-of-stomach

Albertsons Companies reported a +2.8% comp-sales increase for its fiscal quarter (June 14th end) driven by pharmacy (GLP-1 drugs) and e-commerce (3P delivery+curbside). Advan estimates that traffic was up modestly at Safeway and Albertsons. Deconstructing all of these figures implies a -3.6% decline in store units-per-transaction (UPTs), assuming that they passed through the +2.3% food-at-home inflation (CPI) in the period. The decline in UPTs is the natural result of the strong GLP usage (fewer calories eaten) and increased frugality.
3 minutes
Dollar General – Winning share-of-stomach from fast food

Dollar General – Winning share-of-stomach from fast food

Dollar General results were stronger than expected, including Advan’s. Comp-sales increased by +2.4%, whereas we expected a +1.2% increase. Our estimate “miss” was a result of General closing an unusually large number (168) of dog stores. General typically closes 90 stores annually. Thus, this cycle was 7.5X greater, which adversely impacted foot traffic, but which also likely juiced the comp as the dogs were no longer a drag. General also only opened 156 new locations vs.
4 minutes
Target’s Traffic – Better than reported in the news media

Target’s Traffic – Better than reported in the news media

In contrast to the frequent press articles that Target’s foot traffic and sales were down mid-to-high single-digits due to consumer backlash over Target’s DEI policy changes, comp-transactions / traffic was down only -2.4%. Comp-sales for the stores were down -5.7%, which was partially offset by a +4.7% in digital sales (which is mainly store-delivery and curbside). As shown in the table below, February was the softest month per Advan traffic, and the period’s reported traffic* was largely in line with the Advan estimate.
4 minutes
Walmart’s success in grocery and suburban households, convenience makes a difference

Walmart’s success in grocery and suburban households, convenience makes a difference

In our review of Q4 Walmart Inc. results, we highlighted Sam’s compounding success in gaining household share which stems from strong execution on merchandise and service contemporizing (while also benefiting from the favorable macro-consumer trends that are lifting the entire club sector). Today, we shift the focus to Walmart US and its grocery business for this Q1 commentary. (We’ll come back to Walmart’s general merchandise results post Target’s earnings release next week.
7 minutes
Sprouts – distinctive merchandising delivers again

Sprouts – distinctive merchandising delivers again

By Thomas Paulson, Head of Market Insights Sprouts Farmers Market again produced stellar quarterly results; comp-sales increased +11.7% (vs. Advan’s estimate* of +11.9%) and management guided Q2 for a 6.5% - 8.5% increase. We take that outlook to be “conservative” as Advan’s ML estimate* is +8.8%, i.e. something would materially need to change in the external environment for them to not beat their guidance. The +11.9% for Q1 and +8.8% for Q2 embed a 140bps improvement in the 3-year trend.
3 minutes
Trader Joe’s and Aldi– no pause to their gobbling up market share

Trader Joe’s and Aldi– no pause to their gobbling up market share

By Thomas Paulson, Head of Market Insights In the context of ongoing weak earnings results for Kraft Heinz and other branded food names, we took a deeper look into Trader Joe’s and Aldi’s traffic growth. Recall that one of our central themes is that industry growth of food-at-home will be driven by private brands and those retailers that excel at it. That’s principally the reason behind the -7% decline in volume and revenue for Kraft’s North American business segment in Q1.
4 minutes
March Retail Sales - Stronger as previewed

March Retail Sales - Stronger as previewed

By Thomas Paulson, Head of Market Insights As anticipated, March was a strong month for retail sales per the Census Bureau’s Advance Monthly Sales report, and no, it wasn’t all due to pull-forward effects and pre-buying ahead of tariffs as we showed earlier . Yes, there was pull-forward in auto, furniture, and electronics but the month was also better for other general merchandise categories and apparel as well. We attribute that improvement (beyond pull-forward) to warmer temperatures after a harsh February and early March, and an overall strong spring selling season despite Easter’s timing.
3 minutes
Albertsons – 2025 to be another year of price investments

Albertsons – 2025 to be another year of price investments

By Thomas Paulson, Head of Market Insights With Albertson’s quarterly results came the first public comments from incoming CEO Susan Morris (currently COO). Morris touched on management’s current initiatives and didn’t introduce anything meaningfully different, i.e. they will continue to work from the same playbook. Morris, “Our Customers for Life strategy is working. We’re growing digitally engaged customers, omnichannel households, loyalty members and increasing customer traffic. Our stores are operating more effectively and efficiently as new technologies take hold, and we’re proactively reducing our costs.
4 minutes