Food retail sales grew 11.4% in June (ACI)
June retail sales increased 7.5% month over month seasonally adjusted according to the Census Department. On a year over year basis, retail sales grew 1.1%. Grocery store sales fell 1.6% month over month while restaurant and bar sales grew 20%. On a year over year basis, grocery store sales grew a still elevated 11.4% in June compared to 14.5% in May and 12.4% in April, as seen in the following chart.
Meat department continues to lead (KR)
The fresh perimeter of the supermarket had a strong 4th of July driven by meat and produce, but the center of the store outperformed +14%. The perimeter of the store continues to be dragged down by the bakery and deli departments. The meat department accelerated from 16% to 18% sequentially and continues to lead the grocery departments, as seen in the following chart. The center store accelerated from 13% to 14% for the week ended July 5.
Heineken pre-announces 1H results
Heineken’s pre-announced first half 2020 results yesterday. Sales declined 16.4% on an organic basis, with volumes down 13.4%. Beer volumes fell 11.5% overall with mid-teens declines in the Americas and Africa/Middle East/Eastern Europe regions due to full lockdowns in Mexico and South Africa while Europe was down HSD%. The Heineken brand only declined by 2.5%, even growing double digits in 14 countries. Vietnam was a standout performer. Operating profit fell by 52.5%. Despite shares being down ~20% since the pandemic, the valuation appears full based on consensus expectations of two additional years needed to return to 2019 sales and profits. We would point investors instead to Constellation Brands, a Best Idea Long, that has a lower valuation and higher growth prospects.
