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.

By Thomas Paulson, Head of Market Insights Amazon’s Q1 results and guidance for Q2 reflect what we are broadly witnessing – relatively stable demand for goods, some pull-forward effects ahead of tariffs, and a lot of uncertainty. Including Leap Year, the North American retail business slowed about -400 bps QoQ to around +8% unit growth and +6% $-volume growth, per our estimate. Average ticket fell -200 bps as: (1) Amazon and its third-party sellers have been highlighting savings and lower prices, and (2) consumables (which are generally lower-priced items) grew at +12%, which is twice the rate of general merchandise (our estimate).

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.

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.

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.

By Thomas Paulson, Head of Market Insights We’ve recently analyzed Sprouts Farmers Market’s strong 2024 performance and highlighted its success of driving capturing market share and avoiding the grocery industry’s woes. That success stems from merchandise differentiation (see the figure below). The merchandise strategy and the successful execution come from its team – a team that Sprouts affectionally calls its “foragers.” Since the results, Sprouts has met with investors and updated them on Sprouts medium- to long-term aspirations, particularly on retail store expansion, which is to be at a 10% rate in the markets shown in the chart below.

By Thomas Paulson, Head of Market Insights In the context of a market that grew by +3.2% in value and +2.1% in volume, Advan took a look at Publix’s and General Mills’ Q4 results, along with two smaller regional grocers in California – Smart & Final and Stater Bros, brands that we shop and that have been in the news. The results and data from all four reinforce one of our 2025 themes: the year is going to be a difficult one for the industry with (1) consumers increasing their loyalty to retailers that have a strong private label and produce offerings and (2) increased promotions to retain customers by those grocers on the losing side, with those promos being concentrated on the national CPG brands.

By Thomas Paulson, Head of Market Insights To say that this is a dynamic time for grocery retail is a classic underbilling given the inflationary spiral coming out of the pandemic, the substantial share-of-stomach lost by conventional brands to private-label led retailers such as Trader Joe’s and Costco, an abandoned merger by Kroger and Albertson’s, and this week’s news of the departure of their CEOs. Before we jump into the earnings results from Kroger, we’d point readers to our recent analysis of the results from Grocery Outlet , Sprouts , and Walmart & Ahold .