Retailers are outperforming restaurants, with the retail sector gaining 12.2% since July while the restaurant sector has decreased by 6.5%. Comparable sales in retail have been 1 percentage point higher per quarter compared to restaurants since 2024, expected to widen to 4 percentage points in the fourth quarter of 2025.

Positive estimate revisions in retail have been twice as high compared to restaurants. The gap in average check size growth between retail and restaurants has narrowed from 5 to 1.4 percentage points. Retail’s same-store sales growth trends are better than restaurants where transaction growth has slowed.

Publicly traded conglomerates in the restaurant sector are lagging behind the wider industry, with slower same-store sales growth compared to independent companies. In retail, publicly traded retailers are gaining share from smaller competitors. The State Street consumer discretionary index ETF (XLY) has increased by 16% in the past six months, slightly surpassing the S&P 500.

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