When inflation spikes, even high rollers start to consider subbing out Patrón for Cuervo—and that’s good news for businesses selling cheaper goods.

Walmart blew past analysts’ expectations when it reported its quarterly earnings yesterday, with sales growing more than 8% thanks in part to attracting more high-income shoppers. On the grocery side, around 75% of Walmart’s market share gains last quarter came courtesy of customers from households earning $100,000 or more per year.

The value chain’s swanky new clientele reflects a phenomenon that economists call “trading down,” when consumers facing tough times swap high-priced items for cheaper versions.

It’s happened before—during the economic downturn from 2009–2011, the ratio of high- to low-quality goods bought in the US dipped, then increased again when the economy was booming from 2015–2017, according to a recent article in the Chicago Booth Review, the magazine of the University of Chicago’s business school.

So, who else is getting a boost from the rich?

Looks like the wealthy are trading eating endangered species for onion rings and pancakes.

• Applebee’s and IHOP, both owned by Dine Brands, increased sales 6%–8% among households with $75,000+ in annual income in the second quarter, per CNN. This “suggests to us that guests that often dine at more expensive restaurants are finding Applebee’s and IHOP because of their well-known value position,” the CEO of Dine Brands said.
• Chipotle also got more love from high-income diners ditching white tablecloth restaurants in Q2. The burrito chain’s CEO said its customers have relatively high household incomes and upped the frequency of their orders despite a recent price hike, Insider reported.

The other side

While trading down might sound like it’s only a problem for luxury watchmakers, it’s not just rich folks choosing generics instead of brand names—lower-income people are also going cheaper or foregoing purchases completely. For Applebee’s and IHOP, sales to households making less than $50,000 a year declined, and Chipotle’s CEO noted that while its high-income customers were buying more, its typical low-income customer “definitely has pulled back their purchase frequency.” The brands are still in good shape financially, but those customers may not be.

Big picture: Trading down is one reason why discount retailers typically do better than other companies during economic downturns. Walmart shares have outperformed the S&P 500 in each of the past five recessions, according to a Bank of America analysis.—AR

🏛 Cheney ousted in big win for Trump. Liz Cheney, the former third-ranking Republican in the House of Representatives, was defeated in the GOP Wyoming primary by Trump-backed challenger Harriet Hageman. Cheney has been a fierce critic of former President Trump. In a recent ad for her campaign, her father, former VP Dick Cheney, said that “there has never been an individual who was a greater threat to our republic than Donald Trump.” She’s expected to continue to play a role in national politics, including potentially running for president in 2024.

🦻 Hearing aids are becoming more accessible. The FDA is allowing some hearing aids to be sold over the counter for the first time in a bid to make them more available to the 30 million US adults who have trouble with hearing. Hearing aids (which are typically not covered by insurance) could also get a big price cut due to the FDA’s move, saving buyers ~$2,800 on pairs that can run up to $5,000. Currently, just 20% of adults with hearing problems wear a hearing aid.

American Airlines goes supersonic. American Airlines agreed to buy up to 20 jets from Boom Supersonic, a company that designs planes that fly at ludicrous speed—about 1,300 mph, or roughly 2x faster than current commercial airliners. Supersonic flight has been slumbering for nearly 20 years, since the Concorde retired, but Boom wants to bring it back starting in 2029. If you want to fly from NYC to London in just 3.5 hours on a Boom jet, expect to shell out $4,000–$5,000 a ticket.

Have things been feeling tense on the mandatory remote colleague bonding video conferences? We may have just discovered why. Meditation apps like Calm and Headspace are facing steep usage declines from their pandemic peaks.

An analysis by Apptopia found that people just aren’t into doing breathing exercises narrated by Nick Offerman right now. User sessions of Calm are down 26.4% since last July, and 60.3% for its primary rival, Headspace. On average across the industry, meditation apps are seeing a 30% decline in usage over the past 90 days. Does that mean things are getting better, or that things are getting much, much worse? Who can say.

What it does mean is, well, layoffs. Late last week, Calm—the first unicorn in the meditation app space—said it had laid off 20% of its employees, about 90 people. The reason? Calm leadership essentially shrugged and gestured to, you know, everything.

• Not that all this has affected revenue, though. Calm and Headspace both announced annual sales growth for Q2.

Zoom out: Premium meditation subscriptions have become a somewhat common employee perk in the last few years—even the House of Representatives inked a deal with Calm for its staff in September last year.—MK

A man who held up a bank in Lebanon last week walked out of jail scot-free after a judge reportedly dropped the charges against him. The man, Bassam al-Sheikh Hussein, took six people hostage in a Federal Bank branch in Beirut by brandishing a rifle and threatening to pour gasoline on himself. His demand: a portion of his own savings to pay for his father’s medical bills.

After the bank agreed to give him $35,000 from the $200,000+ in his savings account, Hussein released the hostages.

During the six-hour ordeal, a crowd gathered outside in support of Hussein, who became an emblem of their own financial struggles. That’s because withdrawing money from a Lebanese bank is a lot more difficult than remembering your PIN: After the country’s currency lost 90% of its value in 2019, banks essentially froze customers’ foreign currency assets and restricted how much they could take out each month to as little as $200.

Nearly eight in 10 people in Lebanon live in poverty today, according to Human Rights Watch. “No one will say he did the wrong thing,” one bystander told the Guardian. “Desperate people do desperate things. We are all like him. Even the soldiers and the riot police liked him.”—JW

Stat: The third wheel is the one that bears the heaviest load. The median net worth of married couples aged 25–34 was nearly 9x as much as their single counterparts in 2019, compared to just 4x greater in 2010, per the Federal Reserve Bank of St. Louis. Recent economic trends, such as financial stressors caused by the pandemic and the surge in house prices, are making that gap even bigger—since couples can pool financial resources and absorb inflation more easily than singles, the WSJ reports.

Quote: “The system is approaching a tipping point.”

US officials announced fresh water cuts for two US states—Nevada and Arizona—as well as Mexico due to a rapidly drying Colorado River. The Colorado River basin is in its 23rd year of drought, imperiling supplies to the 40 million people who depend on the river for water and hydropower.

Read: The rise of the worker productivity score. (New York Times)

The visiting room: Hear from people serving a life sentence without parole in Angola, the Louisiana State Penitentiary.

Like Wordle: A list of 277 games that are…like Wordle.

The future of the workplace: McKinsey experts in real estate, people and organizational performance, and operations are collaborating to help leaders understand how their organizations can prepare for—and make the most of—flexible work. Read here.*

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With bitcoin prices creeping back up and the Ethereum blockchain about to undergo a major upgrade, now’s the perfect time to brush up on your crypto knowledge. In our Crypto Crash Course, we’ve got the goods—from explaining crypto slang to understanding why the sector crashed in the first place.

Check out all the stories here.

This editorial content is supported by eToro.

Picdoku: Every other Wednesday, we give the classic sudoku puzzle a Morning Brew twist. Play it here.

Summer reading

George Orwell’s famous novel about pigs, Animal Farm, was published on this day in 1945. Let’s test your knowledge of other books you should have read in school but decided to SparkNotes instead.

1. What novel is set in the year 802701?
2. Who wrote The Giver?
3. The following is the first sentence of which book? “In my younger and more vulnerable years my father gave me some advice that I’ve been turning over in my mind ever since.”
4. What are the first names of the two main characters in Of Mice and Men?
5. Which of the following is not the name of a Brontë sister: Louise, Charlotte, Emily, or Anne?

Throughout his career, Tim Ferriss has followed his curiosity not only in building businesses, but also in dealing with depression. On Imposters, he joins us for a conversation on how to find fulfillment through unconventional ways. Listen or watch here.

Check out more from the Brew:

🏷 Reselling items from thrift stores or garage sales has become a full-time job. We challenged three coworkers with flipping $25 into as much money as possible in five days. Watch to see how they did.

Stuck on how to navigate your career? The Brew’s Leadership Accelerator sets you up with exec coaching and more so you can plan your next step. Sign up now.