99 Cents No More (GO) – Buy Grocery Outlet
99 Cents Only Stores are closing all of its 371 locations. The company cited challenges from the pandemic, rising levels of shrink, and inflationary pressures as reasons behind the closure. A going-out-of-business sale will begin on April 5 and “offers up to 30% off on everything from fresh produce to seasonal merchandise and grocery items.”
Grocery Outlet has ~265 stores in California selling groceries, and 99 Cents Only Stores has ~280. The closeout nature of 99 Cents Only Stores points toward an overlap with Grocery Outlet’s customers and merchandise buyers. The sales benefit from winning some of 99 Cents Only Store's revenue could be less than the merchandise benefit of a closeout competitor leaving the industry.
Chick-fil-A’s 2023 (LANC) – Buy Lancaster Colony
Chick-fil-A announced that systemwide revenues were $21.6B in 2023, growing 14.9% YOY. The chain’s revenue has grown by $10B in five years. Its sales per restaurant averaged $9.37M in 2023, up 8%. Including mall-based restaurants, the system averaged $7.5M per store. 48% of the company’s restaurants had an increase in AUVs. The restaurant count increased by 141 or 5.0%. Chick-fil-A is expected to open 183 restaurants in 2024, representing 6% growth. Lancaster Colony is the best way to invest in the growth of Chick-fil-A as a public investor.
Beer shipments improve (STZ, TAP) – Buy Constellation Brands
Beer shipments in February increased by 7.9% YOY to 11.9 M barrels. February’s growth rate was the strongest since May 2021. February’s growth rate accelerated from 1.8% in January, the first month of positive growth in nearly a year. YTD, domestic tax-paid shipments were up by 4.9%. Total beer shipments, including imports, increased by 8.2%. Imports grew by 9% YOY in February and 11.4% through the year's first two months. Imports from Mexico grew by 9.9% in February and 16.9% through the year's first two months. Imports from Canada decreased by 32.8% in February. Strong imports for Constellation Brands, which reports later this week.
