To The Moon

U.S. retail super are one after another announced the second quarter earnings, some of the super's fiscal quarter cut-off date for the end of July, so more reflective of recent consumer trends.

Overall, there are these three phenomena:

1. Food-related must spend more, but the unit price did not improve, go volume not price, can also exceed expectations;

2. Consumption of other items of life, especially optional consumption further reduced, most categories of superstores performance to go worse, and less than expected;

3. Membership stores that also serve both online and offline gained further scale.

$Target(TGT)$ and $TJX Companies(TJX)$ which reported earnings on Aug. 21, showed similar signs, with brick-and-mortar same-store sales being lower than online.

• In TGT's case, brick-and-mortar same-store sales of +0.7% year-over-year were unchanged from expectations, while online sales growth of +8.7% year-over-year was well ahead of expectations of 3.2%.

• The 0.7% growth in brick-and-mortar stores included a 3% increase in volume, while single tickets were -0.9%.

  

  

Likewise, TJX performed similarly:

• T.J. Maxx, which offers a diverse range of fashion apparel, home furnishings and accessories, with a special focus on upscale jewelry and designer-branded merchandise, declined year-over-year, and its counterpart, $Macy's(M)$ missed expectations and lowered its guidance;

• Its largest discount retailer, Marmaxx, however, grew against the wind, with same-store sales +5% y/y.

As we've previously mentioned, $Wal-Mart(WMT)$ had an excellent quarter bucking the trend, with U.S. consumers eating out less ( $Starbucks(SBUX)$ and $McDonald's(MCD)$ re both down), while supermarket spending in the food category is bucking the trend.

Taken together, same-store sales in the other categories are only a bit firmer in the Beauty & Health sector in the current dimension (still positive), but the trend is down in all sectors.

This is one of the "after-effects of inflation", but on the other hand, it is also a reflection of consumers' increased caution.