Good morning.

On one side, soaring fuel prices are making headlines every day, but they're also quietly reshaping where Americans shop.

New results from Costco suggest consumers are increasingly turning to warehouse clubs to stretch their budgets, with the retailer reporting record merchandise sales and unprecedented demand at its gas stations.

Costco beat earnings expectations, posted a strong 89.7% membership renewal rate, and said many shoppers used a Costco gas station for the first time during the quarter.

Let’s dive into today’s edition.

Amazon is taking the AI technology behind its shopping assistant and selling it to other retailers, positioning itself to become the infrastructure layer for the next generation of online commerce.

Key Details: Through Amazon Web Services, the company is packaging the technology behind Alexa for Shopping into a service that allows retailers to launch their own AI-powered shopping assistants in as little as 60 days. The tools can be customized to a retailer's catalog, branding, and customer experience.

Déjà vu: The move mirrors Amazon's long-standing strategy of turning internal capabilities into commercial products—a playbook that previously gave rise to AWS, fulfillment services, and cashierless checkout technology. Luxury fashion brand Kate Spade has already adopted the technology to launch an AI gifting assistant, while other retailers are currently testing the platform.

Why does this matter? As AI shopping becomes a new battleground, Amazon is competing with offerings from OpenAI, Google, and Perplexity while encouraging retailers to build branded AI experiences rather than handing control of customer relationships to third-party agents.

Walmart has launched a new supply chain initiative to move products to stores faster, lower transportation costs, and simplify logistics for suppliers.

New Program: The retailer's new "Prepaid Consolidation" program allows suppliers to ship inventory to a single Walmart-operated consolidation center, where shipments are combined and redistributed across Walmart's 42 regional distribution centers. The model aims to improve transportation efficiency, reduce supply chain complexity, and maintain more consistent product stock levels.

Key Details: Under the program, suppliers can continue to use prepaid freight terms and work directly with Walmart or with approved logistics partners, including C.H. Robinson, Hub Group, and RJW Logistics. Walmart says the system offers transparent pricing while leveraging its national distribution network to improve speed-to-shelf performance.

Big Picture: The move reflects Walmart's broader effort to build a more connected, technology-enabled supply chain as the retailer looks to improve inventory flow, strengthen in-stock levels, and support its everyday low-price strategy.

The European Commission has fined Temu €200 million for failing to adequately prevent the sale of illegal products on its platform, marking the second major penalty issued under the EU's Digital Services Act.

Unsafe Products: Regulators said Temu did not do enough to address the risk of unsafe or illegal products reaching European consumers. The fast-growing Chinese marketplace, which entered Europe in 2023, has rapidly gained market share by shipping low-cost goods directly from Chinese warehouses to consumers across the region.

European Attack: The fine comes as Brussels intensifies scrutiny of Chinese e-commerce platforms. Temu remains under a separate investigation into whether illegal products—including toys and electronics that fail EU safety standards—were actually sold on the platform. Rivals Shein and AliExpress are also facing regulatory investigations.

Kohl's shares surged 20% after the retailer reported its strongest comparable sales performance in four years, fueling hopes that its turnaround efforts may finally be gaining traction.

Key Details: The company beat Wall Street expectations on both revenue and earnings, reporting first-quarter sales of $3 billion and a smaller-than-expected loss of 13 cents per share. Comparable sales declined 1.1%, an improvement from the 2.8% drop recorded in the previous quarter, while net sales fell 1.7% year over year.

Growth Path: CEO Michael Bender said Kohl's is "knocking on the door of growth," citing cleaner inventory, stronger expense control, and improving performance among Kohl's cardholders and private-label brands. The retailer also reaffirmed its full-year outlook despite ongoing pressure from high fuel costs and inflation.

Kohl's additionally confirmed it is eligible for roughly $190 million in tariff refunds, though the funds have not yet been received.

UPS is investing nearly $50 million to expand its logistics network and dedicated industry teams to meet growing demand from automotive and industrial manufacturers navigating increasingly complex supply chains.

Network Expansion: As part of the initiative, UPS is expanding its North American Air Freight network to offer time-definite heavy air freight services to and from Mexico for the first time. Beginning in August, manufacturers will have access to 1-, 2-, and 3-day shipping options designed to move high-value, time-sensitive components across borders more quickly and reliably.

Important Investments: The company said the investment also includes enhanced automation, RFID-based shipment tracking, expanded next-day delivery coverage, and a dedicated team of more than 300 automotive and industrial supply chain specialists.

Single Network: UPS aims to provide manufacturers with a more integrated solution that combines transportation, customs brokerage, and warehousing under a single network.

Asda has signed a deal to use Ocado's software platform to power its online grocery operations, delivery network, and click-and-collect services starting in 2027.

Key Details: The agreement will see Ocado provide the technology behind Asda's grocery website, store-based deliveries, dark stores, and orders placed through platforms such as Uber Eats, Deliveroo, and Just Eat. However, Asda will not use Ocado's automated robotic warehouses or sell products through Ocado.com.

Better Chances: The partnership comes as Asda seeks to reverse years of UK market share losses and strengthen its position against rivals. The retailer's grocery market share has fallen from 14.3% before its 2021 takeover to 11.5%, while first-quarter sales declined 1.5% to £5 billion. Executives said the deal will help modernize Asda's online offering and improve its competitiveness in the fast-growing e-commerce grocery segment.

Walmart says it will use at least part of its tariff refund windfall to lower prices for shoppers, making it one of the first major retailers to publicly commit to passing some of the savings on to consumers.

Price Cuts: The retailer currently has around 7,200 products on temporary price reductions and indicated additional cuts could follow as the federal government issues refunds tied to tariffs that were later struck down by the Supreme Court. CFO John David Rainey said Walmart sees investing in lower prices as the best use of the capital, particularly as lower-income consumers face growing financial pressure.

High Value: The move comes as Walmart navigates a widening gap between higher-income shoppers, who continue spending confidently, and budget-conscious households increasingly focused on essentials. Executives said value remains the top priority for customers, especially in grocery categories where inflation and fuel costs continue to strain household budgets.

Numero Uno: If implemented broadly, the strategy could help Walmart strengthen its price leadership position while increasing pressure on rivals to decide whether to pass on tariff refunds to shoppers or boost profits.

Lululemon has reached a settlement with founder Chip Wilson, ending a months-long proxy fight that had intensified as the retailer grappled with slowing sales and a falling share price.

What’s the deal? Under the agreement, Lululemon will appoint two of Wilson's board nominees—former On co-CEO Marc Maurer and former ESPN marketing chief Laura Gentile—along with a third director possessing apparel product and brand expertise by October. In return, Wilson agreed not to publicly criticize the company for roughly 18 months.

Pilling Pressures: The settlement removes a major distraction for incoming CEO Heidi O'Neill as she seeks to revive growth at the athleisure giant. Lululemon has faced slowing demand in North America, mounting tariff pressures, and intensifying competition from brands such as Vuori and Alo Yoga. Shares remain down nearly 39% this year despite a modest rally following the announcement.

Big Picture: The agreement marks a rare truce between a founder and the company he created, while giving Wilson renewed influence over the retailer's strategic direction without returning directly to the boardroom.

After announcing a $10 billion delivery partnership with DHL eCommerce, the United States Postal Service revealed it is freezing non-essential spending as mounting financial losses push the agency closer to a cash crunch.

No Spending: Postmaster General David Steiner has ordered a halt to discretionary spending on travel, office supplies, consultants, software upgrades, training, and equipment purchases. The move follows a $2 billion quarterly loss and warnings that USPS could run out of cash as early as February without additional reforms.

Key Details: The agency has lost roughly $120 billion since 2007 as declining mail volumes continue to erode its most profitable business. Mail volume fell another 6.3% in the latest quarter, even as revenue rose 2.3% to $20.2 billion. USPS is also suspending certain pension payments, a move expected to conserve $2.5 billion through September.