Commerce Riff with Sri & PVSB - May 19, 2026

SPEAKER_00 0:01

It's May 19th, 2026, and this is the Commerce Riff, brought to you by the CPG guys. Ten minutes of the news stories that matter in commerce this week. I'm your co-host, PVSB, and I'm joined as always by Papa Raj, the father of Pop Stars, co-founder of Think Blue Consulting.

SPEAKER_01 0:18

Shri, how's your week going? My week was going pretty well, Peter. We're a week away from the AMAs. I'm very excited, but the story of the day is not that. The story of the day is your trip to New York City to see the matinee of wicked. Tell us.

SPEAKER_00 0:30

Yeah, uh I took Nadia. We rode Metro North into the city, took the shuttle over to the one train up to 50th and into the Gershwin Theater. We had fifth row seats in the center orchestra, and it was magical, Sri. Just watching my daughter sing along with all the songs that she'd learned and knew so well. It was a magical event. We managed to grab lunch at the Shake Shack at Grand Central and even pick up some cupcakes from Magnolia Bakery. It was a wonderful time, Shree. Was it magical or was it wicked? It was wickedly magical. How about that? All right. Let's get into it. Four stories this week that cut across the full spectrum. There's a huge earnings week across the CPG brand spectrum. Starbucks announced layoffs. We keep going back and forth as a nation on inflation. We have the latest on grocery inflation, and it's not great. Finally, activist investors work on target board appointments. So let's get into it. Tomato prices were up nearly 40% year over year in April, the quickest rate of inflation among the food at home categories that the Bureau of Labor statistics tracks. Food at home prices rose in April at a 2.9% annual clip, the fastest pace of increase in almost three years, according to the CPI data released Tuesday by the BLS. Grocery inflation moved up 0.7% last month compared with March, when the metric eased slightly on a month-to-month basis. Tomato prices increased nearly 40% compared with the same period in 2025, the highest rate of inflation among the food at home categories. Grocery inflation remained somewhat of a holding pattern due to the final two months of 2025, and the first quarter of this year bouncing between a yearly pace of 1.9 and 2.4%, but that pattern abruptly ended in April. The annual pace of food at home inflation moved up by a full percentage point last month, compared with March, the latest month-to-month increase for the metric since May 2022 when prices were skyrocketing and the inflation was double digits. Grosser inflation came in at 1.9% in March. The 2.9% rate of food at home inflation recorded in April is the highest since August 2023 when grocery inflation stood at 3%. Overall inflation at 3.8% in April, the highest rate since May 2023. The BLS did not release inflation figures for most categories for October 2025 because of the federal government shutdown. How convenient. Meat prices continued to play a central role in pushing prices up in April, with beef price inflation remaining in double digits, prices for uncooked beef roasts were up almost 18% last month compared with their level a year ago, while prices for uncooked beefsteaks surged at just over 16% and uncooked ground beef was up 14.5%. Shoppers also played significantly more for produce in April, as prices for fruit and vegetables moved up approximately 6%. Fresh vegetable prices were up an especially fast clip, raising at a rate of 11.5%. Coffee was another source of pain for grocery shoppers. Thank God I don't drink that swell, as the beverage cost almost 20% more last month than it did a year ago. On the other hand, prices for poultry were up less than 1%, with prices for fresh whole chickens declined nearly 2% egg prices, which were a symbol of high grocery prices last year, fell more than 39%. Big news, Shree. What else do you have for us?

SPEAKER_01 4:07

I think Peter, this notion of inflation is completely recovered is based on the data here released by the Bureau of Labor Cities because it's false. We're looking at egg prices and determining where inflation is. Eggs have certainly been controlled at this point. That's pretty clear. But everything else is through the roof. That's why, Peter, we are going to trade a Joe's repeatedly because it's half the price of a full basket. Anyway, after a long time, we've seen a week where we had it was earnings bonanza week. And we saw a bunch of consumer goods companies reporting, and then we have healthy news across the board. So consumer staples companies delivered a broadly positive and resilient set of earnings last week, with pricing power continuing to support revenue growth, even as volumes remained under pressure. Do you remember, Peter? There was a two-year period there was no pricing, and most consumer goods companies actually, from a stock standpoint, suffered. Does it mean we're now entering an era where pricing is everything? Which means inflation, here we go. Broadly, the consumer staple sector, SPDR from the XLP has outperformed the SPDR, SP 500, ETF trust, SPY. Year today rising about 8.35% versus roughly 5.6 for the broader market. Driven by a clear defensive rotation to staples. Out of 35 consumer staple names that are part of the SP 500, SPY, 12 reported earnings last week. That's a third, with most delivering beat on estimates. 11 out of 12 firms beat EPS estimates, while one reported inline numbers. This is in stark contrast to what we spoke about general short of estimates. Of the 12 companies on the SP 500 index, 10 reported year-over-year earnings growth, 9 saw top-line growth. One of our favorites, Coca-Cola Q1 earnings report comfortably beat expectations across nearly every key metric. And the move higher ripple through the broader consumer staple space. Global unit case volume grew 3% during the quarter with all segments positive. Congratulations to Coca-Cola volume growth. All three are top Q1 estimates with revenue up 3.2% to$5.3 billion, adjusted EPS of dollars$132. As higher pricing offset, declining shipment volumes. A favor of us, Colgate Palm Olive. Consensus estimates of analysts with its Q1 earnings report revenues of 8.4% to$5.32 billion. Non-gap EPS was 97 cents versus the 94 consensus and 91 cents a year ago. The company said its leadership in toothpaste continued with global market share at 41.1 year to date, while its leadership in manual toothbrushes continued with global market share at 32.6. Here comes another of our favorites, Hershey, HSY. Chocolate maker set a profit guidance for the year with a midpoint that is less than Wall Street estimates, though it did beat Q1 estimates. Its candy mint income segment, retail takeaway increased 8.1% despite higher prices. Share of Slorox came under pressure after the company's fiscal Q3 results, and outlook for the year suggested continued headwinds for the consumer products company. Its non-gap EPS of$1.64 beat by 10 cents, while its stop line was at$1.67 billion, in line with estimates, but no year-over-year growth. A reminder we had an episode recently from CAGNI with their leader, the person who leads the actual engineering and RD and Innovation, and Pat Corsi from Chief Marketing Officer. Mondeleese International saw Q1 organic sales jump 3%, leading estimates with revenue up approximately 8%, driven by strong growth in emerging markets. However, adjusted EPS fell 14.9% year over year to 67 cents, missing expectations. Looks like it's lost its way in the last couple years, especially with cocoa pricing going up and the results back to back. At the industry level, four household products, three food products, two beverages, one personal care product, one tobacco, and one distribution retail company reported earnings this past week. Amongst the other consumer staple names that are reporting earnings this upcoming week, Archer Daniels, Middle In, Kenview, Craft Wines, Tyson Foods, and Peter and I will report against all of those the following week. Over to you, Peter. I think you said something about Starbucks and layoffs.

SPEAKER_00 8:15

I did, but before we move to that, Shree, since you mentioned Colgate's results, I'd be remiss if I didn't uh congratulate Brigitte King, the chief digital officer at Colgate Palm Olive, who recently announced her departure. She made a notable impression a number of years ago appearing at a Cagny conference. She set an incredible tone for what follows at Colgate Palmolve. So, Brigitte, we wish you well in your next endeavor. All right, Starbucks on Friday announced another round of corporate layoffs and said it plans to shutter some regional support offices as part of its ongoing turnaround. The company said it will cut 300 U.S. jobs, adding it has started a review of its international corporate workforce. The layoffs did not affect its coffee house employees. The combined severance costs and reassessment of its office space will result in restructuring charge of$400 million, the coffee chain said. Starbucks expects to record$280 million in non-cash charges related to the impairment of long-lived assets and$120 million in cash charges tied to the job cuts. We're taking further action under the back to Starbucks strategy, building on our strong business momentum and working to return the company to durable, profitable growth, the Starbucks spokesperson said in a statement to CNBC. Leaders have taken a hard look at their respective functions to further sharpen focus, prioritize work, reduce complexity, and lower costs. Friday's announcement marked Starbucks' third round of layoffs since CEO Brian Nichol took the helm. In February 2025, Nickel said the company would cut 1,100 jobs and not fill several hundred other positions. Seven months later, the company announced another 900 job losses for its non-retail workers as part of a$1 billion restructuring plan. Starbucks had 9,000 U.S. non-retail workers and 5,000 international employees working in regional support operation roles. As of September 28, 2025, according to a regulatory filing. During Nichols' tenure, the company has embarked on an extensive and fruitful turnaround of its U.S. business. Coffee giant sales slumped as increased competition and more budget-conscious consumers weighed on demands for its drinks. Under Nichols, Starbucks has improved coffee operations and added buzzy new menu items, reintroduced seating to its locations, and beefed up staffing at its coffee house. So Shri, I can tell you they're opening up a Starbucks less than three miles away from me in North Brantford, Connecticut. Meanwhile, the other coffee company, Duncan, is preparing to enter the Canadian market, going after Tim Hortons. Oh, I don't know if I want a piece of that action. Those Canadians not really liking American brands these days. Let's see. What would that be, Peter? Tim bits will become Dunk Bits? Uh I think that I think there's going to be a battle and ensuing. And if take it from the bourbon business, if you're an American brand, you're kind of persona non grata in Canada these days. But we'll see what they've got in store, Shri. Over to you.

SPEAKER_01 11:19

All right. So now we move to target a group of activists. Investors is urging target shareholders to vote against the re-election of executive chair Brian Cornell, who was the previous CEO and lead independent director Christine Leahy at the retailers annual shareholders meeting in June. Amongst the reasons cited is Leahy's oversight of the decision to retain former CEO Cornell as executive chair and special advisor per letter to shareholders filed in notice of exempt solicitation on Friday. In our view, Target has endured years of strategic and operational missteps that have led to significant under performance compromising long-term shareholder value. The letter from Mercy Investment Services, SOC Investment Group, and Trillium Asset Management states the recent CEO succession does not signal that the board is focused on the genuine reset we believe is critical to turn the company around. While Target did not directly comment on the activist investor letter, the retailer directed retail dive to its 2026 proxy statement, which outlines the directors nominated in the respective qualifications. Cornell's departure CEO was first announced last August, with company veteran Michael Fidelki named as his successor. The move was announced. Some industry experts question how Fidelki would be able to make the necessary changes with the struggling company, with his former boss Cornell, in remaining in the boardroom, especially as the executive chair. Fidelki formerly took over the CEO role, more operational nature in February, and has since unveiled some of the core components of his turnaround strategy. The approach centers on an effort to regain merchandising authority, which includes revaps of the beauty and baby sections in store, as well as refresh some of Target's private label brands. Given the persistence performance weaknesses of Target, we were surprised that the port's shifting to promote former CEO Fidelki rather than I an outsider, the activist investors said. In their letter, while we are prepared to give Ms. Fidelki a chance to run the company and see the performance turnaround, the pitfalls of this decision are compounded by former CEO Cornell's continued presence on the board in the powerful executive chair role and a special advisor to management. Although the arrangement is slated to be short-lived, lasting until March 27, we believe that Target is a critical juncture and cannot afford another year of the status quo. Talk about a retailer, Peter Hayday's automatic choice for new moms now struggling and having to repamp departments. You know, personally, I think I have shopped a lot at Target when both Rhea and Laura were born.

SPEAKER_00 13:37

What about you, Peter? It's a staple, no question about that, Shri. Let's wrap on this week's Commerce Riff Reminder. Check out our recent conversation with Barbara Connors and Brian Dowie with Kroger Precision Marketing. Shri and my recap of our visit to Amazon Upfront. If anything we covered this week sparks a thought, drop it in the comments. Send us an email. We read all of it. And if you're not following us on LinkedIn, Instagram, TikTok, Facebook, and YouTube, well, now's the time. We'll see you next week.