Following the jilted tie-up between 7-Eleven (Seven & I Holdings) and Circle K (Alimentation Couche-Tard), Seven & I updated investors on its growth strategy. (Here we will speak solely of the US business. Additionally, the IPO plans for the US remain.) The strategy includes expanding its private label food offering and quality to raise consumer perceptions in regards to distinctiveness, “taste,” and value, but especially as it relates to fresh and prepared meals.

As previewed , July retail sales accelerated from June’s slower pace due to: first, a strong and early start to back-to-school, second, less disruptive weather, and third, a lessening of consumer uncertainty about inflation, as shown in the chart below. (The New York Fed’s survey also showed that expectations for the rate of inflation 1-year out also dropped for those with a household income above $100K). We suspect that the first was the largest factor, and as such, underlying retail sales should slow (ex.

Advan Auto’s Q2 results were all about whether they can rebuild DIFM market share and drive profitability higher. On the former, market share losses continue as readers will recall from our note on O’Reilly’s results. In an industry* that grew by +2-3% in the period, Advan’s comp-sales increased 0.1%, and comp-transactions were down low-single-digits. DIFM comp-ed up low-single-digits (O’Reilly comp-ed +7% in DIFM). Management shared that the April 19th to May 17th period was similar to the quarter’s ending 4-weeks that July (July 12th), with a soft spot in between.

It’s been quite a challenging period for fast casual restaurant operators and their investors; that’s the result of a smaller “pie” and more mouths at the table. The pie is smaller due to shifts in consumption to gas & convenience and at-home as consumers seek out lower-cost calorie consumption, as well as fewer calories consumed (Wegovy, Ozempic, and Zepbound). More mouths at the table is the result of the high unit growth in the industry (+7% for the larger publicly-traded companies).

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.

The forth issue of The Advan Buysider is now available, featuring updates to the names from previous issues, along with new themes on GWW, FAST, HRL, MLM, CAR, HTZ, WM, RSG, WSN, ORLY, GPC, AAP, SYK, ZBH and TKR . As a reminder, The Buysider is designed to provide timely, novel, and impactful insights on specific names and topics using Advan’s data. Download Issue #4 Watch the webinar

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.

As the data implied, Caesars Entertainment’s Las Vegas segment results were down for Q2, including table drop falling -5%, food & beverage down -6%, other down -9% (which is last year’s strong concert programming), hotel occupancy down -190 bps, and EBITDA down -9%. That said, the higher-end (we put Caesar’s Palace in that category) pulled higher going through June, as shown in the chart below. (We filter for >1 hour visits when trying to estimate hotel and casino revenue.