This week, consumer-facing companies unloaded a dump truck’s worth of stats showing how 40-year-high inflation is affecting shoppers’ behavior. After taking the necessary safety precautions, your courageous newsletter writers dove into the reports to bring you the most important insights.

Americans are loading up on essentials

Walmart, the largest retailer on the globe by revenue, said on Monday that inflation-strapped consumers are opting for need-to-have goods (like household essentials and groceries) and avoiding nice-to-have purchases, such as new clothes.

That echoes a warning from Target earlier this summer that shoppers are shunning big pandemic-era purchases—including TVs, outdoor furniture, and fitness equipment—as their budgets get squeezed. The good news from all this? Expect “everything must go”-level discounts as Walmart and Target try to get rid of their excess inventory.

Foodies crawl back into their wine cellars

When inflation is rampant, nothing beats a Double Cheeseburger + Coke, topped off by ice cream.

Both McDonald’s and Coca-Cola reported impressive sales in Q2. McDonald’s said that its value menu and new product releases (did not know Chocolatey Pretzel McFlurry is now a thing) brought diners to the Golden Arches, while Coca-Cola showed that its brand is so durable that not even decades-high inflation could convince consumers to buy RC Cola instead.

Meanwhile, Unilever’s ice cream division, which includes Ben & Jerry’s, was one of the conglomerate’s few units that posted volume growth last quarter.

Other takeaways

• People are still shelling out for cars: While a shortage of parts and China lockdowns stung GM’s profits, the automaker said that there was no sign that demand was waning for car purchases.
• Same goes for anniversary gifts: LVMH, the world’s largest luxury goods company, called its first half of 2022 “excellent” as more shoppers scooped up Louis Vuitton handbags and celebrated with Dom Perignon Champagne.

Bottom line: Higher prices appear to be shifting consumer behavior from certain categories to others—but overall spending has remained resilient.—NF

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Shopify lost its pandemic bet. The e-commerce platform laid off 10% of its global workforce—about 1,000 people—and it’s all because of the chart you see above. CEO and founder Tobi Lütke said that the company went all-in on the hypothesis that Covid would permanently boost e-commerce adoption, but…like with streaming, home fitness, and countless other sectors, behaviors have generally reverted to pre-pandemic norms. “It’s now clear that bet didn’t pay off,” Lütke wrote.

Russia goes independent in space. Russia will withdraw from the International Space Station in 2024, according to the country’s space chief, leaving the US, Japan, Europe, and Canada in an awkward roommate situation. The context is key: Antagonism between Russia and the West has skyrocketed after Russia invaded Ukraine, plus it lost significant income to its space program after NASA started using SpaceX rockets—instead of Russian ones—to travel to the ISS. The remaining countries may not be able to keep the ISS running once Russia leaves.

Biden to revisit student loan pause and relief. President Biden is once again considering cutting $10,000 in student loan debt, as well as extending a Covid-era pause in student loan debt repayment, Bloomberg reported. The loan forgiveness would only apply to some borrowers and a final decision hasn’t been made, but pushing the repayment moratorium past Aug. 31 seems like a sure thing: Earlier this week, news outlets reported that the Education Department had advised loan servicers to hold off on sending payment reminders.

The manufacturing giant 3M has found itself buried under a mountain of legal trouble over one of its smallest products: earplugs. Much like thermal underwear and the sneakers that men begin wearing once they turn 50, earplugs aren’t about “looking good”—they just have to do their job. According to thousands of US veterans, though, 3M’s earplugs did not.

Following three years of costly litigation (including $300 million awarded to 13 plaintiffs as of May), 3M announced Tuesday that it would spin off its healthcare unit and place its earplug subsidiary, Aearo Technologies, into Chapter 11 bankruptcy.

What happened: Nearly 250,000 service members and veterans are currently suing 3M, alleging that the company knowingly sold defective earplugs, resulting in premature hearing loss and tinnitus for thousands of military personnel. Based on current verdicts and the staggering amount of cases outstanding, the company could be liable for an amount substantially greater than its ~$80 billion market value.

Crazy stat: There are currently more plaintiffs for 3M earplugs than for any other product or drug.

3M said it’s committed $1 billion to a trust to pay out claims and would provide additional money if necessary. The plaintiffs plan to challenge the bankruptcy filing, with one noting that the trust works out to less than $5,000 per veteran affected.—MK

The rumors are true: The Choco Taco is being discontinued. Citing “an unprecedented spike in demand across our portfolio,” Klondike parent company Unilever announced this week that it’s killing the Choco Taco to focus on keeping its other ice cream products in stock.

The internet predictably cried a chocolate river for its favorite ice cream taco—even if most people haven’t actually eaten one in 30 years. So how did this confectionary masterpiece come to be? The Choco Taco was created in 1983 by Alan Drazen, a Philly-based former Good Humor truck driver. He explained to Eater why the taco is the superior shape for a cone:

• “When you eat a sugar cone, you generally eat the nuts, chocolate, and ice cream on the top, and then when you get to the cone, you’re eating ice cream and cone. With the Choco Taco you’re getting the ice cream, cone, nuts, and chocolate with just about every bite.”

Some celeb fans agree: Tech entrepreneur and Reddit co-founder Alexis Ohanian tweeted at Unilever that he’d like to buy the rights to the Choco Taco to “keep it from melting away.” Connecticut Senator Chris Murphy (facetiously) pledged to introduce legislation that would allow Choco Taco production to continue.

In response to the outpouring of feels, Klondike said, “We’re working hard to find a way to bring Choco Taco back to ice cream trucks in the coming years.”—JW

Stat: Saudi Arabia released a hype video for “The Line,” a planned vertical city that would extend 106 miles long and 1,640 feet tall. Included in the blueprints: a train that whisks you from one end to the other in 20 minutes, space for up to 9 million residents, and a power grid that runs fully on renewable energy. The Line, which would constitute the world’s largest structure, is just one part of a bigger Saudi megacity called Neom, a highly controversial $500 billion project intended to modernize the kingdom.

Quote: “We’re going to continue to support photos. It’s part of our heritage. That said I need to be honest: I do believe that more and more of Instagram is going to become video over time.”

Instagram head Adam Mosseri released a video responding to criticism from the likes of Kylie Jenner and Kim Kardashian around the platform’s overhaul to become more like TikTok. Mosseri argued that users are seeking out more videos anyway, and that Instagram has to stay on top of trends.

Read: When an influencer couple breaks up, what happens to their brand deals? (Marketing Brew)

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Word search: Dig into some Junior Mints with today’s movie studio-themed word search. Play it here.

Size ’em up

Consumer giants are in the spotlight as they report earnings for the second quarter. But how do they stack up against each other?

Rank these five companies by market capitalization: McDonald’s, Coca-Cola, Walmart, PepsiCo, Costco.

As prices surge, how is money factoring into your dating life? Are there any financial red flags you’d be concerned about? We hit the streets to find out: Watch now.

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