Commerce Riff with Sri & PVSB - August 25, 2026

PVSB 0:01

It's August 25th, 2026, and this is the Commerce Rift 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 Raz, the father of Pop Stars, co-founder of Think Blue Consulting.

SPEAKER_00 0:17

Shree, are you ready for your European concert vacation? What's going on?

SPEAKER_01 0:21

More importantly, Peter, before that, we're going to Wrigley Field and we're actually going to record a podcast from the dugout, aren't we? Say more. What's going on at the Cubs home?

PVSB 0:31

Well, we've been invited by our friends at Ace Hardware, notably Kim Lafko, the CMO, and Molly Jelm, the head of Red Vest Media, to attend their upcoming 2027 Upfront event, which is taking place inside of Wrigley Field. And after their presentation, we'll put some chairs up on top of the dugout. And you and I get to interview these two incredible leaders, previous guests on our podcast, to talk about what's new and exciting about Red Vest Media, which is in its first year of infancy. Shree, it's a bucket list moment. It goes without saying for you and me to be able to record an episode inside a major league ballpark, let alone one of the most iconic ones that exists. I know you agree with me. It's gonna be one heck.

SPEAKER_01 1:19

You know, you know, Peter, Molly obviously gave this opportunity to us to actually record from on top of the dugout of the legendary Chicago Cubs, one of the oldest, one of the three remaining original stadiums, Wrigley Field, because she knows what a diehard baseball fans we are. But man, talk about bucketless Hall of Fame, watching an induction, getting the jerseys with pride, getting to the dugout of the Cubs, Wrigley Field, and recording a pack as it's been a baseball bonanza bucketless moment for you and me last month.

PVSB 1:49

Shree, all that's left after the World Series, since we've already been to that, is the Field of Dreams game next year. We're gonna plan on doing that in August out in Dyersville, Iowa. All right, while Martin Target make earnings announcements and groceries the focus, and looks like Amazon too is joining the race to reset pricing reference. Cyclospora gets real and Home Depot starts express delivery. I'll kick it off. Now it's not an easy time to be a food retailer. Customers are worn down by food affordability woes. Pharmacy sales are taking a hit from changes under the Inflation Reduction Act, and high fuel costs are persisting. As they deal with these economic woes, second quarter earnings results by Target and Walmart this week highlight how the grocery category is helping two of the nation's most prominent grocers stay resilient. Target, which is in the midst of a financial turnaround, has leaned heavily into product discovery, trendiness, and revamping its center store selection, executives this week. This focus on grocery has seemed to revive its fun tar J reputation. The retailers' food and beverage sales grew by 7.2% in Q2, outpacing its comparable store sales increase of about 3%. They completed major in-store updates in Grocery Beauty and the Fun 101 Toys and Electronics category, registered strong digital and membership games with Target Circle 360 and Target Plus, gross merchandise volume both up over 40%. Target updated its full year 2026 sales growth outlook to around 5% and raised its adjusted EPS guidance range to 9.9 to 10.9%. Walmart's grocery business is also in growth mode. The retailer's stateside grocery category recorded mid-single-digit comp growth. The retailer doesn't give an exact figure, even as its U.S. comp store sales, excluding fuel, rose by only 2.6%. Continuing to build on its grocery share gains, Walmart is looking to new meal delivery options and temporary price cuts in its food aisles doubling down on its one-stop shop and low price perceptions. Quote, our price gaps to conventional grocers here in the U.S. are strong as they continue to widen, unquote. Walmart CEO and President John Ferner told investors Thursday. Couple of key points to highlight Sri e-commerce, global e-commerce sales jumped 23%, driven by 52% surge in U.S. marketplace growth and strong pickup delivery numbers. Digital and advertising, global advertising revenue climbed 38%, led by major gains from Walmart Connect and flip card ads. Looking towards the future, the fiscal 2027 guidance, Walmart raised its full year net sales expectation to a range of 4% to 5% and adjusted EPS to 2.80 to 2.87. There is some third quarter caution, though, the company forecasted lighter than expected Q3 sales and an adjusted EPS guidance of 62 cents to 64 cents, which tempered investors' enthusiasm as was felt in the stock price after this announcement. While Target's grocery strategy focuses on relevancy and Walmart's own price and convenience, the company's approaches both hammer home what consumers have already come to know them for. As Ferner told investors Thursday morning, having the best prices across a basket of goods helps us continue to build trust for our customers and members by helping them save money at a time when many households are carefully managing their budgets. Shri, over to you.

SPEAKER_01 5:28

You know, I'm going to get into this extension of this conversation. We're looking at some amazing numbers over here, results, great EPS's, grocery businesses on fire. From payments.com, I found a great conversation about how Amazon, Target, and Walmart are actually investing in resetting base price mindsets for the consumers. So consumers today, of course, have more price information than they ever had, and potentially less confidence in the meaning of any individual price. Walmart, for example, isn't treating lower prices simply as a merchandising decision. It's effectively treating them as an investment. Milk, eggs, detergent, diapers, cereal, other frequently purchased products function as informal benchmarks for everyone. Shoppers know approximately what they should cost. Those products help consumers from an opinion about an affordability of thousands of other products whose prices they actually don't sit down and track because they're looking at perimeter. Walmart had more than 11,000 price rollbacks during the second quarter, compared with about 7,200 at the end of the first. Target, which has lowered prices on more than 10,000 products over the past year, says it will continue to invest in price. TGX is also planning to use a projected tariff free fund to offset merchandise costs, limiting the pressure to push those costs onto shoppers. Customers tell us they're still feeling pressure. Walmart CEO John Furna said in the company's Thursday, August 20th, earnings calls. But it's clear customers are looking for value and convenience and they want things as fast as possible. Your shoppers don't necessarily buy more food because they see lower prices, Fernet added during the call. But over time, what we're trying to do with rollbacks and low prices is build trust with customers. Consumers have not stopped spending at all, but household budgets remain strained enough that relatively small differences in everyday expenses can influence where and what they shop. Most valuable price cup may not be the one that generates the largest incremental unit sales. It may be the ones consumers actually remember. Retailers traditionally equated value with discounting, but after several years of volatile prices, consumers may value something adjacent to cheapness. Certainty. The retailer, the wedstoress phase of the consumer economy, may not be the one offering the deepest discounts. It may be the one that convinces shoppers to stop actually looking for them. That distinction matters. Most in high frequency categories, households planning grocery budgets don't really care whether milk is inexpensive today. They care whether roughly the same basket will still fit inside the household budget next week. Data in the August Payments Intelligent data book says five ways consumers make tight budgets work harder found that 53% of paycheck to paycheck consumers struggling to pay bills had cut spending on non-essentials such as dining out, entertainment, and travel during the last year. At the same time, Target's own private label expansion attacks a price problem from yet another direction. Food and beverage sales, as Peter's just reported, rose 7% last quarter, and Target plans to add roughly 600 private label food products, including 400 under the label Could and Gather. Private label is normally explained through margin. Retailers control more of their economics and avoid sharing some of the value with national brands. But proprietary merchandise is another advantage in the era of radical price transparency in that there is nothing identical to compare it with. Search for a nationally branded detergent and a shopper can compare Walmart, Target, Amazon, and supermarket prices within seconds. Search for a proprietary good and grab the product, and the comparison is just subjective. It could represent a key growth strategy as digital commerce continues commoditizing products that can be compared easily on price. The same logic actually now extends beyond grocery exclusive brands, limited collaborations, and retail-owned products create merchandise whose worth cannot be reduced to a browser tab showing five competing prices. As search becomes easier with AI, retailers have great incentive to sell merchandise for it. There is no clean comparison at all. All right, Peter.

PVSB 8:57

Alright, Shri. Cyclosporas costing the protocile real money, and the recovery won't be instant. New numerator data that was out this past Wednesday put numbers behind what many of us suspected. Shoppers are voting with their carts on the Cyclospora outbreak, and salad mix kits are taking the hit. Top line numbers, 6.5 million U.S. households stopped buying salad mix kits in the month ending July 26th. That's compared to the 72 million households that did still buy them. 10% of households cut spending on salad fresh greens, 25% stopped buying altogether. Numerator pegs the risk at about $280 million in monthly produce spend. What's interesting is the subst what's interesting is the substitution behavior or lack of it. Nearly half of the shoppers say they've shifted or plan to shift to canned frozen veggies, but the data shows that swap isn't fully offsetting the produce pullback in fresh. The silver lining for retailers and CPGs, 80% of shoppers who paused salad kit purchases, say they'll come back once the outbreak clears. This looks like a short-term confidence problem more than anything, Shri. Some context on the outbreak itself. The CDC now has linked 11,000 cyclosporosis cases to it, with 450 hospitalizations and two deaths. Source has been traced to contaminated iceberg lettuce grown in central Mexico, distributed by Taylor Farms. Recall and per CDC should be out-of-the-store restaurants at this point. Worth watching how quickly trust rebuilds once the recall fully works through the supply chain and whether retailers use this window to push harder on traceability messaging at shelf. Shri, you have the last story, don't you?

SPEAKER_00 10:46

Thank you, Peter.

SPEAKER_01 10:47

So Home Depot is the latest to enter the express delivery race. It's now offering express delivery nationwide for customers to receive eligible orders in three hours or less, according to a Tuesday press release by the company. The services uses Home Depot's supply chain network alongside more than 2,000 US stores as fulfillment hubs per the release. Pro and DIY customers can use the delivery service for a $7 flat fee in most major markets and a $10 flat fee in LA. A Home Depot spokespexon tolls, sister publication supply chain dive. Growth that's grocery dive, of course. No subscription or membership required per the press release, express delivery. Eligibility for thousands of SKUs, including plumbing, hardware, paint, tools, will be available on product pages and in the corner checkout per the release. Now Joe, majority of those deliveries are actually happening in less than one hour. EVP of Interconnected Retail Jordan Braggie said during its latest evenings call. And so we'll continue to work that promise time down, time down to customers in the months ahead. But super excited about that, he says. Prior to the nationwide rollout, Braggie noted that the service was operating in some markets for several months as a test. Home Depot has been focused on maximizing its supply chain capabilities, including speed year deliveries. EVP of merchandising Billy Bastec said that Home Depot had cut its delivery lead times of the US by 45% over the last 18 months. But encouraged with the positive performance we are seeing in these markets and will continue to expand population coverage and SKUs through the year, Bastic told analysts. In addition to the new express delivery option, Home Depot operates a delivery center network for thousands of items and categories such as lighting, vanities, and building materials, according to the press release. Working alongside local stores, the network delivers more than 65% in stock parcel products same day or next day, indeed. 55% of in-stock pig and bulky orders, meanwhile, are delivered within two days. The home improvement retailer also offers same free day delivery on orders of $25 or more that are placed by a specific time, as well as next day appliance delivery that reaches 60% of the U.S. population for the press release. In addition, we've evolved our appliance delivery model to better serve direct purchases. Senior executive VP and Marie Campbell to landless, we now stock a select assortment of appliances that can reach our customers next day in certain markets. Take us home, will you?

PVSB 12:50

That's a wrap on this week's Commerce Riff. A quick reminder to catch up on our recent episodes that we had a great conversation recorded live in Cannes, France that you don't want to miss. It's Adam Silverblatt from Instacart with Andrew Liftsman, our friend from Media Ads and Commerce. We did it at the CPG Guys La Résidence. That's not true. We did it at their office. I'm going to say this again, Shri. That's a wrap on this week's Commerce Riff. A quick reminder to catch up on our recent episodes. We had a great conversation recorded live in Cannes France. So you don't want to miss. It's with Adam Silverblatt from Instacart and our friend Andrew Lippmann from Media Ads and Commerce. And of course, earlier this year, we recorded an episode with our friend Anita Watkins, CEO of the Insights Association, talking about the risks that AI bring to the analytics space. If anything we cover today sparks a thought, drop it in the comments. We read everyone. If you're not following us on LinkedIn, Instagram, TikTok, Facebook, and YouTube, well, now's the time to do so. Make sure to find Shree at the Walmart Seller Summit September 1st and 2nd in San Diego. We'll both be in Northwest Arkansas September 15th to the 17th for Walmart Data Ventures Inspire. And again in Las Vegas, September 21st to 24th for grocery shop. I know we both stopped by our Bank of America branches, got our full straps of $2 bills for tipping purposes. Make sure to ask us if we got a $2 bill on us. It's a pretty good chance we will. We'll see you next week.