|
CALL DETAILS:
|
We will host our Food Retailers 2023 outlook call on December 20 at 12:30 PM ET. Hedgeye's Macro team continues to see further evidence that 1H23 is in Quad 4. The consumer has not seen this level of food inflation in a generation. Food inflation has peaked but will stay elevated despite easing input costs. Following the USDA's lead, the consensus has penciled in food-at-home inflation of 2.5% to 3.5% for 2023. We will show how our starting point for 2023 top-line growth for food retailers is north of 3.5%. We will also do a deep dive into the changing tailwinds and headwinds for the sector, followed by a critical driver analysis of how each of our covered food retailers (KR, ACI, COST, BJ, WMT, GO, SFM) is impacted. As part of the company analysis, we moved BJ's Wholesale Club (BJ) from the Long list to the Short list. We will provide our analysis of the contribution from the gasoline business to BJ's results in 2022 and how that will lead to underperformance in 2023.
Among the topics we will dive into are:
- The outlook for food inflation
- The changing consumer behavior
- Wallet share winners and losers
- Supply chain challenges
- Competitive activity
- Implications of a Kroger-Albertsons merger
- Input cost outlook
- Soft commodity outlook
- Gross margin outlook
- Traffic trends
- Government transfer payments
