Who says the big boxes are dead?
A study by UBS analyst Michael Lasser revealed that artificial-intelligence shopping agents recommended the biggest retailers more often than not. Digitally native merchants? Out of luck.
The UBS team submitted a dozen identical shopping prompts to ChatGPT, Claude, Gemini, and Muse in three areas: New Jersey, New York, and Minnesota. The findings: "AI recommendations generally reinforce established industry leadership," he writes, with Walmart leading the list, followed by Costco Wholesale.
Per Lasser, Walmart was frequently the top recommendation and the secondary one as well, across categories from groceries to auto parts: "This suggests that AI models increasingly view Walmart as a default answer for everyday consumption."
Costco, meanwhile, wasn't suggested "because of convenience or immediacy. Instead, it was...associated with value, quality, and bulk purchasing," Lasser writes. Costco's "brand equity has become deeply embedded within the information ecosystem."
Being the best at something did pay. For instance: Dick's Sporting Goods and Aldi popped up frequently, which Lasser attributes to their leadership in their corners of the industry and reputation for value.
Still, it wasn't all bad news for those left out. Recommendations were more varied in categories where availability was location-dependent, or no retailer was the obvious winner. This includes big categories like furniture and Korean beauty products.
The upshot: In the AI world, there's still market share up for grabs.
Write to Teresa Rivas at teresa.rivas@barrons.com
Last Week
Happy Stocks
The "What, Me Worry?" market finished the week higher despite angst over the bond market and the Strait of Hormuz. The S&P 500 hit a new high on Tuesday, slumped, then rebounded on Friday to close the week up 1.15%, thanks, again, to AI and bullish earnings forecasts.
La Détresse
Budget talks begin soon in France, which is under siege by student protesters demanding more education funding and, you know, bond traders. The French budget deficit is a worrisome 5.1% or so of GDP. Could it default on its national debt? Who knows? Cuts to the country's generous social programs seem inevitable.
Fed Friendly
The minutes from the September Federal Open Market Committee meeting were a snooze. But it was worth noting, per Barron's Megan Leonhardt, that the decision to raise rates wasn't only unanimous, but unusually without rancor. And most members were keen on another increase by year end. Data panic alert: September CPI will be out Wednesday.
High Courts
The Supreme Court Monday tackled Suncor Energy v. Board of County Commissioners of Boulder County. Can plaintiffs sue in state court for climate-change damages? Suncor says it's a federal matter. Colorado's high court ruled for the plaintiffs. Justice Samuel Alito recused, so a 4-4 outcome is in play, which would be a victory for Boulder.
Next Week
Monday 10/12
Fixed-income markets are closed in?observance of Columbus Day.
Tuesday 10/13
Third-quarter earnings season commences, with financials leading the?way. Citigroup, JPMorgan Chase, Goldman Sachs Group, and Wells Fargo release quarterly results on Tuesday, followed by Bank of America, BlackRock, and Morgan Stanley on Wednesday, and Charles Schwab and Interactive Brokers Group on Thursday. Outside of financials, Johnson & Johnson and UnitedHealth Group announce earnings on Tuesday.
Wednesday 10/14
The Bureau of Labor Statistics releases the consumer price index for September. Consensus estimate is for a?3.6% year-over-year increase, two-tenths of a percentage point more than in August. The core CPI is expected to rise 2.5% from 2.4% previously.
Thursday 10/15
The Census Bureau reports retail sales data for September. Economists forecast a 0.3% month-over-month gain, after a 1.1% jump in August. Excluding autos and gas, sales are seen?rising 0.2%.
The Numbers
3.2%
Projected rise in real global GDP in 2026 as the AI boom cushions the effects of inflation. For 2027, 3.1%.
$49.2 B
Wall Street's bonus pool in 2025, a record. This year's haul should top that as industry profits head to $90 billion.
10,814
Registrations of China's Jaecoo 7 in the United Kingdom in September as the SUV topped U.K. vehicle sales.
780%
Increase in Samsung Electronics' quarterly operating profit, reflecting ferocious demand for memory chips.
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