Good morning.

Every time you tap a credit card, a small fee quietly changes hands. For years, retailers have argued those fees are too high—and after more than two decades of legal battles, a U.S. court has finally moved a massive $38 billion Visa-Mastercard settlement one step closer to reality.

The proposed deal would slightly reduce swipe fees and give merchants more flexibility in which cards they accept. But many retailers aren't celebrating yet. They argue the settlement leaves the underlying payment system largely intact, meaning the billions they spend each year on card processing fees may not fall by much at all.

Let’s dive into today’s edition.

Walmart is accelerating its push into ultra-fast delivery, announcing plans with drone partner Wing to expand service into seven additional metropolitan areas, including Philadelphia, Phoenix, San Diego, New Orleans, Memphis, Salt Lake City, and the San Francisco Bay Area. The companies aim to launch operations across the new markets by 2027.

Drone Deliveries: The expansion builds on growing momentum for Walmart's drone program, which currently operates across 66 locations in Texas, Georgia, Arkansas, and North Carolina.

Key Stats: The retailer recently completed its one millionth drone delivery, with more than 40% of those deliveries occurring in the latest quarter alone. Wing's drones can deliver products ranging from groceries and household essentials to electronics in as little as 30 minutes while traveling at speeds of up to 60 miles per hour.

Delivery Race: The move is part of Walmart's broader strategy to strengthen last-mile fulfillment and compete more aggressively with Amazon. Walmart and Wing ultimately plan to offer drone deliveries from more than 270 stores by 2027, potentially bringing rapid delivery access to roughly 40 million U.S. residents

Amazon is expanding deeper into freight transportation, officially launching a nationwide less-than-truckload (LTL) service through its Amazon Supply Chain Services division. The move opens Amazon’s transportation network to businesses beyond its own marketplace, allowing shippers to move palletized freight across the U.S. using Amazon’s logistics infrastructure.

What’s Happening? The service builds on Amazon's existing LTL operations, which have served marketplace sellers and vendors since 2019. Amazon is promising next-day pickups, real-time shipment visibility, and nationwide coverage for freight ranging from one to six pallets. Major companies, including Procter & Gamble, 3M, Lands' End, and American Eagle, are among the first customers using the expanded offering.

Market Reactions: Investors viewed the announcement as a direct challenge to established freight carriers. Shares of FedEx Freight fell about 7%, while Old Dominion, XPO, Saia, and ArcBest all declined as markets weighed the competitive threat posed by Amazon’s expanding logistics footprint.

Big Picture: With more than 80,000 trailers, 24,000 intermodal containers, and a vast transportation network already in place, Amazon is increasingly positioning itself as both a retailer and a direct competitor to traditional freight operators.

US retailers are maintaining tight control over inventories despite a temporary rise in import shipments, signaling continued caution about the economy.

Key Details: According to the latest NRF and Hackett Associates Global Port Tracker report, import volumes are expected to increase in May and June, but largely because they are being compared with unusually weak levels following the 2025 tariff disruptions.

Slow Demand: Retailers remain hesitant to aggressively restock ahead of the traditional peak shipping season. Industry executives cite softer consumer demand, persistent inflation, trade policy uncertainty, and geopolitical tensions as reasons to maintain lean inventories rather than build excess stock.

What’s Next? The rebound is expected to be short-lived. Import cargo volumes are forecast to decline through much of the second half of 2026, with shipments expected to fall below year-ago levels between July and September.

Even as inflation, geopolitical uncertainty, and weak consumer sentiment weigh on household confidence, American shoppers appear ready to open their wallets for this year's Prime Day sales event.

Key Details: A survey by e-commerce platform Omnisend found that 55% of U.S. consumers plan to shop during Amazon Prime Day, up from 45% last year. Two-thirds of respondents expect to spend the same amount or more than they did in 2025, with most planning purchases of up to $200.

What's Driving Demand? Consumers remain highly price-conscious, but many see Prime Day as an opportunity to consolidate planned purchases and stock up on essentials while discounts are available. Apparel, electronics, beauty products, groceries, and household goods rank among the most sought-after categories.

Retail Showdown: As Amazon prepares for Prime Day from June 23–26, major retailers are launching rival promotions to compete for consumer spending. Walmart, Best Buy, Target, Kohl's, and Staples have all scheduled overlapping sales events, turning late June into a high-stakes retail showdown

The collapse of Rite Aid is creating an unexpected growth opportunity for grocers, with Whole Foods Market among the retailers moving into vacant pharmacy locations across the U.S.

New Home: Whole Foods has signed a lease for a former Rite Aid store in Brooklyn, adding another location to its growing urban footprint. The move comes after Rite Aid's bankruptcy led to the closure of roughly 1,250 stores, leaving behind large retail spaces in high-traffic neighborhoods.

How does this help? Former drugstores offer grocers ready-made retail locations with strong visibility, parking access, and established customer traffic patterns. As grocery chains seek faster expansion and smaller-format stores, these vacant sites provide a cost-effective alternative to building from scratch.

The Big Picture: The transition reflects a broader shift in retail real estate. While some former Rite Aid stores have been acquired by rivals such as CVS Health, Walgreens, Kroger, and Albertsons, an increasing number are being converted into grocery stores

British retail group Frasers Group has launched a €2 billion takeover offer for German fashion brand Hugo Boss, moving to acquire the 74% of the company it does not already own.

What Happened? Frasers, already Hugo Boss's largest shareholder with a 26.1% stake, offered €38 per share in cash, representing a modest 4.3% premium to the company's closing share price. The bid comes as Hugo Boss struggles with slowing sales, store modernization efforts, and a broader turnaround strategy aimed at reviving growth.

Why It Matters: If successful, the acquisition would add Hugo Boss to Frasers' growing retail empire, which already includes brands and stakes across sportswear, department stores, e-commerce, and consumer electronics. The move also underscores how weakened consumer demand and falling valuations are creating acquisition opportunities across the retail sector.

What's Next? Hugo Boss said its board will review the unsolicited offer. Frasers has indicated support for current CEO Daniel Grieder and management, signaling that the bid is aimed at accelerating the company's turnaround rather than replacing leadership.

JBS, the world's largest meat processor, will close a major beef plant in Pennsylvania and a protein-packaging facility in Tennessee as a historic shortage of cattle squeezes the U.S. beef industry.

Key Details: The Pennsylvania facility, one of the largest on the East Coast, employs more than 1,700 workers and accounts for roughly 8% of JBS's U.S. beef processing capacity.

What’s Causing the Shortage? The U.S. cattle herd has fallen to its lowest level in 75 years after years of drought, high feed costs, and herd liquidation. Industry efforts to rebuild cattle numbers have also been complicated by the return of the New World screwworm and ongoing restrictions on cattle imports from Mexico.

What’s Next? JBS said it will shift production to other facilities as it focuses on efficiency and modernization. The move follows similar capacity cuts by rivals Tyson Foods and Cargill, underscoring how tight livestock supplies are forcing meat processors to shrink operations even as beef prices remain near record highs.

Sleep Number, the maker of high-end smart mattresses, has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York and plans to sell itself to Canadian retailer Sleep Country Canada in a deal valued at $415 million.

What’s Happening? The company entered bankruptcy with roughly $672 million in debt after years of weak demand, rising costs, and mounting financial pressure.

The company pointed to inflation and President Trump's trade policies as major factors behind its decline, saying tariff uncertainty disrupted its global supply chain, raised operating costs, and eroded profitability. Despite efforts to refinance debt, close stores, simplify product lines, and monetize future tariff refunds, Sleep Number reported a $50 million net loss in the first quarter on $319 million in sales.

What’s Next? The proposed acquisition would combine Sleep Number's 572 U.S. stores with Sleep Country's 300-plus Canadian locations, creating one of North America's largest mattress retailers

Grocery Outlet is rolling out Afresh’s AI-powered ordering platform across all departments in its network of more than 500 independently operated stores, marking a major technology investment to improve inventory management while preserving the autonomy of its store operators.

Afresh Start: The retailer selected Afresh because its AI platform can adapt to rotating products, uncertain inventory counts, and unique store-level conditions, helping operators balance in-stock availability, shrink, labor, and margins without relying on rigid merchandising programs.

Big Picture: The move reflects a broader trend of grocers turning to artificial intelligence to improve operational efficiency. Grocery Outlet says the technology will simplify store operations and support profitable growth, while Afresh views the partnership as further validation that AI-driven inventory management is expanding beyond fresh foods into center-store and general merchandise categories.