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At this week’s ICR conference, most presenting retailers announced that they had an on-plan, or better, holiday season. The message from restaurant companies was more nuanced, full-service better (in-line with our preview), limited service, still facing headwinds, which are likely to last for the 1H, excluding the $90bn estimated (per Morgan Stanley) increase in consumption from consumer-facing tax cuts (OBBBA). Yes, lots of talk of AI. It won’t be 2026.

Aritzia reported very strong sales growth for its fiscal Q3, +54% for the US region, and while management guided for a slower rate for FQ4, Advan’s transaction data points to ongoing strength (+50%) suggested a lot of conservatism in that guide. Aritzia is driving strong growth in both established regions (New York, Chicago, and Los Angeles) through strong digital sales and store-level comp-sales increases, and new markets, ahead of having a physical store in them.

In a difficult industry backdrop, Albertsons Co. is driving stronger traffic and less-bad unit trends by amplifying its loyalty offers and passing less cost inflation on to its shoppers; both of which eat into margin. Management doesn’t expect the environment to improve anytime soon, and so, they are doing what they can control – reorganizing, restructuring work streams, and cutting costs to pay for the greater value presented to shoppers, while also contemporizing their services – expanded and fast store delivery (more than half of the quarters digital orders were delivered in 3 hours or less), AI shopping agents, etc.

Chipotle introduced new low-price-point menu items on December 23rd, such as the High Protein Cup of Adobo Chicken at $3.82 and a Single Chicken Taco at $3.50. The aim, in our view, is to address affordability perceptions and put something of substance on the menu for lighter eaters. Traffic built leading into the launch; however, one week later, the enthusiasm waned. Moreover, the stronger period was matched by Taco Bell, which also enjoyed a favorable spurt.

· Simon Property Group’s 18-year project of turning around the first indoor mall, Southdale, has come to fruition as a sharply curated pinnacle brand and luxury showcase and experience. · Visits were up +11% this holiday season (Nov + Dec). Even consumer spend at Southdale’s legacy retailer Macy’s was strongly up (+17%), outperforming other comparable Macy’s locations in the market. While shopping for Christmas gifts, we visited the first indoor mall in the US — **Southdale Center Mall **in Edina, Minnesota, owned by Simon Property Group.

Amazon, Walmart, Five Below, and Ross Dress for Less have continued to outperform in traffic and spend. Most brands have shown a stronger trend than last week, especially Kohl’s and Ross. Store spend has been less vibrant than traffic due to more shopping around for deals, i.e. some average ticket pressure, and online wallet taking share. Last week, we wrote that we expected the pace of holiday foot traffic to accelerate going into Christmas day, and as shown below, that has happened; however, Advan’s transaction data shows that store spending has not, save department stores and off-price.

The positive trend in foot traffic has held since Black Friday Weekend. Amazon, Walmart, Five Below, and Ross Stores have continued to outperform in traffic and spend. Best Buy, Target, and traditional department stores are trailing their FQ3 performance. The October monthly retail sales from Census report (today) reinforces that trends that have been underway all year continue, i.e. no new trends or inflections shown in the report. The season-to-date pace of foot traffic and sales have been solid for Five Below, sporting goods, Walmart, Apple, but more neutral for Target and the department stores – including Dillard’s and Bloomingdale’s, both of which had strong FQ3 results.

The grocery industry is becoming more dynamic with lots of announcements of new partnerships with DoorDash, Uber Eats, and Instacart. Kroger is the latest as it pivots from large robotic warehouses to 3P delivery and more stores. Kroger, Walmart, Costco, and Aldi are also accelerating their new store programs. Joining the scrum, Amazon is rapidly expanding served markets with same-day grocery delivery. The consumer hunt for value, combined with the increased access to the value of Walmart, Costco, Aldi, etc.

Dollar store results for the 2H are coming in strong despite pressure on the lower-end consumer. The outperformance is the result of strong execution on Retail 101 fundamentals by new management teams. Tariff cost pass-throughs, better in-stocks, and better assortments are driving the comp-ticket. Improved store standards, consumer trade down, and increased social media marketing are driving comp-traffic. Despite the widely reported pull-back in spending by the less-affluent during the September – November period, for FQ3, the dollar stores reported comps in line with expectations, resulting in consistent 2-year trends, save Five Below, which again, reported blow out results; that stems from selling purely discretionary merchandise driven by a rocket-fueled toy / merchandise trend of Lilo & Stitch, K-Pop Demons, and SpongeBob.