BUSINESS

When Kroger removed Red Bull from all of its grocery stores and gas stations, that seemed like an isolated dispute over price with one brand.

Even when the grocery chain pulled another brand, Boar’s Head, from about 200 locations, it still seemed like a small issue. In those stores, however, a sign appeared, which explained the situation.

“A bright yellow sign reads: ‘Boar’s Head products will no longer be offered at this location. We continue to provide a variety of high quality deli meats and cheeses, including many customer favorites from our premium deli selection,’” reported WCPO.

Neither company would explain why the change was being made, but industry analysts told the news station price might be the issue.

“Kroger recently raised the price of some of its Boar’s Head meats — such as Oven Roasted or Maple Honey Turkey — to $14.99 a pound. Kroger’s Private Selection versions are often $10.99 a pound, significantly less,” the local news station shared.

Kroger CEO Gregory Foran shared during the chain’s second-quarter earnings call that these are not necessarily isolated changes.

Kroger wants to hold the line on prices

Robbie Ohmes with Bank of America asked Foran about the impact of inflation on grocery chains.

“As I see what is happening, particularly with gas prices, diesel prices, you know, historically, when you get an environment like this, you see it start to flow through,” he said.

He noted that Kroger has “a lot of active work underway at the moment in terms of cost savings. You know, some of that is built around what we call our COGS (cost-of-goods-sold).

Foran made it clear that the company wasn’t doing that just to have to raise prices for other reasons.

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“What we wanna do is make sure that the great work that is happening in that area just is not if you like, frittered away as we then have to deal with price increases. So there is you know, some really good work that the teams are doing in this area, but I would expect that pressure is actually going to mount,” he said.

Foran didn’t exactly threaten vendors, but his words, plus Red Bull and Boar’s Head removals, provide a clearer picture of how Kroger is responding when suppliers seek higher prices

He also shared how the chain might replace some of those products.

Kroger has been working to cut costs in order to lower some prices.Shutterstock

Kroger expanding its house brand

In some cases, the Boar’s Head products were replaced with Kroger house brand deli meat. That’s something the chain intends to do more of.

“Looking ahead, we are also expanding SmartWay, our opening price point brand. With more items, broader coverage across the store, and improved visibility both in store and online,” Foran said.

Consumers, of course, might show loyalty to brands such as Red Bull and Boar’s Head. Kroger, however, is giving itself more alternatives when negotiations with national brands break down.

Kroger is making a large bet on its entry-level private label brand.

“You are seeing us expand our range of SmartWay products there, you know, circa from about 130, we will get that up to 1 thousand over the next year and a bit. Some of those are already hitting the shelves, and we are very pleased with how they both look and taste and feel,” he added.

Kroger, it should be noted, did not hide that the dispute with Red Bull is over cost.

“We are currently out of stock while we work with our suppliers to keep prices affordable for you,” reads a sign hanging where the energy drink is normally shelved, WCPO reported.

Kroger’s betting on prices over brand loyalty

RTM Nexus CEO Dominick Miserandino thinks consumers have a breaking point when it comes to price.

“For a lot of everyday products, the brand name matters less when the price difference gets big enough. Kroger has a real opportunity with its house brands, especially with shoppers watching every grocery dollar,” he told TheStreet.

That’s not a strategy that will work across all products.

“The risk is assuming that applies to every category. There are still products where shoppers want their brand, and they’ll go somewhere else to get them,” he added.

Miserandino, in an earlier interview with TheStreet, thinks that Kroger is going to hold the line on raising some prices.

“Kroger pulling Red Bull off the shelves comes down to basic shelf math. Red Bull wants to raise wholesale prices, and Kroger refuses to pay it,” he said.

As a Red Bull drinker, I’ll share that unless Kroger sampled a house brand knock-off, I’d likely simply buy the brand elsewhere, but it makes sense to have a fight over an energy drink because I’m probably not changing grocery stores over the lack of Red Bull.

I would also appreciate house brands in areas where I’m less particular.

GlobalData Managing Director Neil Saunders thinks private labels are broadly a smart play for grocery chains.

“The investments have certainly been worth it for grocers. They’ll probably push on it even harder,” he told The Washington Post.

ALSO READ: Kroger pulls a gas perk as pump prices set a September record

Bank of America wants investors who are looking at the stock market through a political lens to ‘follow the profits’. 

In an analysis stretching back to 1936, the bank found a bigger divide between winning S&P 500 years based on earnings growth than on which party held the White House.

Political headlines offer plenty of reasons to feel bullish or bearish. Tariffs, taxes, and spending decisions can change the outlook for businesses, making Washington difficult for investors to ignore.

But the party in power tells only part of the story.

BofA’s comparison refocuses on what companies earn, a less dramatic subject that can get buried beneath the daily political noise.

For investors deciding what deserves their attention, the findings offer an excellent starting point.

BofA’s 68% finding puts earnings at the center of the market debate

Bank of America’s argument comes down to a striking gap.

According to the bank, earnings effectively separate winning stock market years much more sharply than political affiliation does.

As reported by Seeking Alpha, going back to 1936, BofA found that 68% of positive S&P 500 years coincided with rising earnings per share, while 32% coincided with falling earnings per share. The political split was considerably narrower: 54% under Democrats and 46% under Republicans.

That gives the earnings comparison a 36-percentage-point spread, versus eight points for party affiliation. However, these are shares of winning years, not the probability that stocks will rise under either condition. 

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That said, the stock market enters this debate with substantial gains. Through September 25, the S&P 500 was up 13.12% this year, 5.25% over three months, and 17.47% over six months, according to Yahoo Finance data. Its rebound from March’s low left it less than 1% below August’s high.

Next comes the Nov. 3, 2026, midterm election.

Historically, that calendar has challenged investors. From 1945 through 2025, midterm years averaged S&P 500 price gains of 3.8%, versus 10.9% in other years, according to J.P. Morgan Wealth Management. Yet fourth quarters averaged a 6.4% gain.

This year has already outpaced that full-year midterm average. 

BofA’s takeaway puts the next test squarely on corporate results, in that whether profits can support further gains as investors weigh what the election could mean for taxes, spending, and business costs.

S&P 500 earnings crushed forecasts, but the gains need unpacking

Corporate earnings give BofA’s argument strong backing.

By Aug. 28, FactSet’s Q2 earnings growth tally stood at 52%. Some 86% of S&P 500 companies beat profit expectations, with aggregate earnings exceeding estimates by 26.5%.

AI and cloud demand helped drive technology’s strength. However, investment gains at Alphabet (GOOGL)  and Amazon (AMZN) inflated headline profits, making the surge look stronger than operating performance alone would suggest.

Still, the strength extended beyond those giants. 

Companies outside the Magnificent Seven posted blended earnings growth of 31.8%, their strongest showing since late 2021. That breadth gives the earnings story a lot more substance.

Q3 is mostly an expectations story so far. As of Sept. 25, analysts projected 29.1% earnings growth, up from 26.7% on June 30. Seven of the first nine reporting companies had beaten EPS estimates.

The drivers are revealing.

Energy earnings estimates rose 18% as oil climbed, while technology estimates increased 4.1%, led by AI giant Nvidia. Higher energy profits, however, can coexist with greater pressure on consumers.

Meanwhile, 72 companies issued above-consensus EPS guidance, versus 44 below consensus. The positive share, 62%, comfortably exceeded its five-year average of 41%.

Bank of America finds earnings matter more than politics for stock gains.Michael M. Santiago / Getty Images

Investors should buy earnings durability, not just earnings beats

BofA’s findings favor keeping investment decisions linked to profits. But the price paid for those profits still determines how much room investors have for disappointment.

As of Sept. 25, the S&P 500 traded at 19.2 times forward earnings, below its five-year average of 19.8 but above its ten-year average of 19.0. That suggests a reasonable valuation relative to recent history, but it’s far from being an obvious bargain.

The catch is that forward valuations depend on forecasts holding up. For example, a 10% reduction in expected earnings would push that multiple to roughly 21.3 with unchanged stock prices.

For diversified investors, this supports maintaining core exposure while spreading new purchases over time. Rebalancing oversized tech positions can also reduce dependence on a handful of earnings reports.

When selecting individual stocks, prioritize operating income, cash generation, and management’s guidance. Alphabet and Amazon’s investment gains show why headline EPS alone can exaggerate underlying momentum.

Q3’s projected 29.1% earnings growth sets a demanding benchmark. Paying a premium makes more sense when recurring revenue and cash flow support it.

Use earnings season to test those assumptions.

Consider adding after price declines when business prospects remain intact, and reassess holdings when guidance weakens enough to undermine the valuation.

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It’s important to have guardrails around your legacy.

My wife and I have more than a dozen Mexican restaurants within three miles of our South Florida home. There’s everything from a nice local sit-down chain to taco trucks, informal taquerias, a few bodegas that also have food menus, and two separate variations of Tacos Al Carbon, another locally owned chain.

That doesn’t count all of the sports bars and chain restaurants that offer fajitas, tacos, nachos, and other Mexican favorites.

And while my city might have slightly more Mexican options than the average, competition in this space has been fierce. That has contributed to On The Border filing Chapter 7 bankruptcy and closing all its restaurants. Several other chains, including Guzman y Gomez, which closed all its U.S. locations, Tito’s Burritos & Wings, and Acapulco, had significant closures.

It’s a very competitive market, and that has put Condado Tacos in a challenging position, where it has closed restaurants in multiple locations.

Mexican restaurants face intense competition

While competition has been intense, Mexican restaurants have grown their overall market share from 6.1% in 2015 to 7.7% in 2025, according to an analysis of Technomic data.

Eleven percent of restaurants in the United States serve Mexican food, according to a Pew Research Center analysis of data from SafeGraph, which curates information about millions of places of interest around the globe, and the user review site Yelp.

And although Texas and California have the most Mexican restaurants, most of the United States has access to the cuisine.

“This analysis finds that 85% of U.S. counties have at least one Mexican restaurant. In turn, the counties that don’t have Mexican restaurants tend to have small populations. The 15% of counties without any Mexican restaurants have about 4 million people living in them. That is just 1% of the total U.S. population,” according to Pew Research.

In addition to intense competition, Mexican restaurants have suffered from the same woes that have hit much of the industry.

In more than three decades covering restaurants, I’ve rarely seen operators face a combination of elevated costs, cautious consumers, and economic uncertainty at the same time.

“Survey data shows that three out of 10 Americans have reduced their spending at retail stores and are dining out at restaurants less frequently than a year ago,” according to an S&P Global Data report.

A number of Mexican restaurants have closed locations or shut down entirely.Oscar Wong / Getty Images

Condado Tacos denied it was having problems

In January, Condado Tacos laid off a number of its corporate staff.

“We recently made the difficult decision to right-size our Support Center team to operate more efficiently, better positioning the business for long-term success,” said CEO Derrick Pratt in a statement provided to 614NOW. “Condado continues to be a healthy, growing brand with no restaurant closures since our founding.”

It was not long after that statement that the closures began. As part of a wave of closures, the chain left South Carolina in August.

“The Greenville restaurant that once brought build-your-own tacos and hand-painted Upstate murals to Magnolia Park has closed for good, and now its landlord is suing to collect more than $51,000 in back rent. Court filings allege Condado Tacos stopped paying its minimum rent and other required charges starting in April 2026, months before the Woodruff Road location shut its doors,” Hoodline reported.

It was a situation that escalated quickly.

Magnolia Park Greenville sued on June 30, 2026 naming both the restaurant’s LLC and its parent, Revolucion Holding, according to WSPA 7News.

Its other South Carolina restaurant, in Mount Pleasant, closed Aug. 29, 2026 nine days after its landlord moved to evict, according to The Post and Courier.

Both shutdowns are part of a recent pattern.

Condado Tacos has closed multiple locations

The Condado website shows 49 locations remaining across nine states.

Condado Tacos has closed multiple restaurants in 2026, including locations in Mountain Brook, Alabama; Broad Ripple in Indianapolis; and south Charlotte, according to BizJournals.

The Mountain Brook, Alabama, location closed after about three years in business, added BizJournals.

Condado’s Broad Ripple restaurant was its original Indianapolis-area location and has permanently closed, according to Hoodline.

The chain’s south Charlotte restaurant has permanently closed. Court documents show the landlord is seeking more than $79,000 in past-due rent and other lease charges, reported BizJournals.

Condado also closed its Powell, Ohio, carryout-only location in 2024, added BizJournals.

Condado Tacos underwent a corporate restructuring in January 2026 that included layoffs. The company confirmed the layoffs but did not disclose the number of positions eliminated.

Many other Mexican chains have struggled

Prices have played a large role in keeping Americans away from restaurants.

“Consumer prices for food away from home increased 39.3% from January 2019 to January 2026. By comparison, the index increased 19.2% across the previous seven years, from January 2012 to January 2019,” according to another S&P Global Data report.

On The Border: The chain closed all locations before its operating company, OTB Hospitality, filed for Chapter 7 liquidation on June 19, 2026; franchised units in South Dakota, Florida, Nevada, California, and South Korea kept operating, Yahoo Finance reported.

Gringos Locos: The Orlando-based Tex-Mex chain, founded in 2009, closed all its Orlando-area restaurants with no public explanation, according to TheStreet.

Tito’s Burritos & Wings: Closed all three remaining New Jersey locations (Summit, Ridgewood, and South Orange) after dinner service on March 1, without a bankruptcy filing, reported CBInsights.

Mexican chains that have shrunk

Acapulco had as many as 39 locations; the Glendale, Calif., closure would leave only Long Beach, according to TheStreet.

After community backlash, Glendale reversed course and said it will stay open until further notice, added Art Voice.

El Torito: It once operated 187 restaurants in 25 states; now it is down to roughly two dozen, all in California, reported TheStreet.

Salt and Lime: Its Arizona parent filed Chapter 11 on Aug. 20, 2026, its third affiliate case this year after two dismissals, according to Yahoo Finance.

Some Mexican franchised restaurants have closed

Moe’s Southwest Grill: Franchisee Quality Fresca filed Chapter 11 Aug. 4, seeking to exit 16 leases, mostly in Florida; it had 38 stores, down from 69 in 2021, reported Fast Company.

Del Taco: Bankrupt franchisee Matadoor closed all 14 Georgia restaurants in late February. The chain’s footprint fell from 594 in 2024 to about 558, according to Restaurant Dive.

Healthy Mexican chains trimming locations

Torchy’s Tacos: Closed four stores Feb. 3, exiting Columbus, Ohio, plus Altamonte Springs and Winter Garden, Fla., according to CBInsights.

Chuy’s (Darden): The Sterling, Va., location closed Jan. 11, and Midtown Nashville closed March 27, reported The BurnWSMV.

Pappasito’s: Pappas is closing the 1983 original on Richmond Ave. in Houston on Sept. 13, according to Yahoo Finance.

Fuzzy’s Tacos: Closed all remaining Houston-area restaurants in September 2026, added Yahoo Finance.

Related: Kroger pulls a gas perk as pump prices set a September record