Certain Industries Are Beating Inflation

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Barrels of digital ink have been poured lamenting unprecedented U.S. inflation, which is currently at 8.3% and reached an all-time high of 8.5% in 2022.

The negative attitude is justified. Major economic indicators like consumer mood, manufacturing indexes, and small company confidence have mostly moved into negative territory in 2022 as a result of the increase in inflation.

Brick-and-mortar stores are once again proving their endurance. The whole retail industry is still in comparatively good shape, with more people visiting stores nationally in July 2022 than in the same month in 2019.

As household budgets become more constrained across the nation, more customers are turning to discount and dollar stores for lower-cost alternatives.

Fitness is rising – and low-cost chains are benefiting the most: Fitness subscriptions tend to come with some sort of commitment, so consumers who joined gyms before inflation hit the headlines may be trying to get the most out of their monthly membership fee and hitting the gym for budget-friendly recreation.

Trading down locations are very advantageously situated: Businesses that provide less expensive alternatives to conventional dining and retail are experiencing an increase in visitors.

Particularly well-positioned in the current environment are brands like McDonald's, which can welcome diners trading down from full-service restaurants, or Citi Trends, which can draw shoppers trading down in the clothes industry.

Five energy companies top a list of the top 1,000 US companies ranked by gross margin strength. Similar to many healthcare brands, consumer staples businesses like Pepsi and Coca-Cola have experienced very little margin erosion this year.

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