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.

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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.

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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.

The 7th issue of The Advan Buysider is now available. As a reminder, The Buysider is designed to provide timely, novel, and impactful insights on specific names and topics using Advan’s data. I welcome your feedback. Should you not see names / sectors that are of high interest today, reach out to me. The takeaways from #7: 1) You’ll notice less timeliness in this issue; I focused more on expanding the names covered in each sector than updating current names / themes.

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.

· Black Friday Weekend traffic was softer YoY due to adverse weather, a softer weekend box office, aggressive online promotions, and potentially a strong Saturday college football schedule that kept folks on their couches for the day. (They sprang into shopping malls on Sunday). · The trends align with what we said about September (and likely October) retail sales. This suggests that the Christmas season is likely to be good, but not gangbusters like 2024’s.