Grocery comp-sales are picking up and our hypothesis is that it’s driven by more share-of-stomach coming from restaurants (out-of-home). Inflation is also a contributor; Q2 CPI for at-home was +2.3%, up from Q1’s +1.8%. Added convenience may be a driver. We’ve been surprised by the ongoing strength in store delivery. Instacart reported a +17% increase in orders for Q1, up from the Q1 rate of +14%. Walmart has shared that store-delivery is growing substantially, especially by more affluent households.

As readers know well, anything housing-related has been in the dumps since 2022. Mattress retail has been especially in the dumps, with production volumes well below the levels of 2009 and the Great Financial Crises. However, the trend now appears to be slightly improving despite the 30-year mortgage rate still at 6.5%, based on early reports; what gives? Somnigroup (the rebranded Tempur Pedic company, along with its purchase of Mattress Firm) reported better top-line results today.

McDonald’s reported a much-improved US comp-sales increase of 2.5%, a 510bps QoQ improvement. Advan data estimates that traffic improved 200bps QoQ and that ticket improved 300 bps to a +2.1% increase. The 2.1% increase is less than inflation (CPI) at 3.5% indicating that McDonald’s is underpricing the market in order to amplify its value positioning; we know that they are aggressively messaging “McValue” deals. CEO Chris Kempczinski said, “Overall, we’ve made good progress with our value offerings.

Growth in all of Amazon’s reported revenue lines accelerated for Q2, save AWS, which held at +17% growth (its 2-year rate improved by +230 bps QoQ). Focusing on just US eCommerce, paid units increased around +12% with sales a couple points less due to lowered prices on general merchandise and a shift in the sales mix to consumables, which generally have a lower average price as well as a lower merchandise margin rate.

On the surface of Starbucks’ quarterly results, little improvement is visible for the US segment; US comp-transactions were again down -4% and profits fell -36%. However, as we highlighted in our last review of Starbucks’ results, it is succeeding in reclaiming the third place in people’s lives. We draw that conclusion as the dwell time and visit frequency improved once again, and especially for those visits exceeding 30 minutes – as shown in the table below.

Auto part retail, and specifically, O’Reilly (ORLY), Advance (AAP), and NAPA (GPC), are interesting businesses from an alternative data estimate perspective given that commercial (or DIFM) is half of the industry’s revenue and that’s billed business vs. POS / credit card. (For NAPA it’s nearly 80%.) Mobility data captures both – the DIY visit to the store and the store’s delivery truck leaving the store to deliver parts to a repair shops.

Most will know that the telecommunications industry is converging and transforming via new networks. By converging, we mean that legacy wireless brands are rapidly encroaching on cable’s broadband business with both new fiber builds and wireless broadband (5G fixed wireless), and cable is using Verizon’s network (a wholesale relationship) to offer wireless service and encroach on legacy wireless. Interesting, this week T-Mobile opened its network to cable to sell wireless service to small- to mid-sized enterprises.

As anticipated, Chipotle reported soft results for Q2, including comp-transactions declining -4.9%; total revenue of $3.14B was marginally above Advan’s $3.11B estimate, i.e. darn close. (The -4.9% is -260 bps of deceleration QoQ; Advan’s visits estimate decelerated -245bps QoQ, or roughly the same.) As a reminder, the fast-food industry is facing cyclical and secular pressure on sales – a topic that we presented to UBS’ clients this week, where the cyclical is consumption shifting to less expensive channels like food-at-home and convenience , and the secular is fewer calories consumed due to weight loss drugs (Ozempic, Wegovy, etc).

As previewed , June retail sales increased at a slower pace than May, which itself was down from April’s; additionally, CPI showed the beginning of tariff costs being passed through to the consumer. Both were modest shifts, and so far in July, things have broadly firmed up, which we suspect is early back-to-school activity. This back-&-forth in momentum has been a persistent pattern since 2022, with seasonal periods picking up nicely (last Christmas was a blow-out holiday, for example) followed by broader and deeper troughs in between.

Domino’s reported a much improved quarter vs. Q1 with US comp-sales increasing by +3.4%, driven by mix (Parmesan Stuffed Crust Pizza), positive pricing (COGS increased +4.8%), and comp-transactions (+2.0%). Carryout comp-sales increased +5.8% and delivery, +1.5% with more households choosing the cheaper carryout option. The Parmesan Stuffed is a new item and CEO Russell Weiner said, “Customer praise for this product has been significantly higher than any of our recent product launches.