American households don't all feel the same economy. Prices for food and fuel hit the people living closest to their paychecks first, while higher earners keep spending on experiences. This week's third-quarter reports, landing alongside a hot inflation print and a 10-year Treasury yield that pushed above 5%, put that K-shaped split on the page.
Value grocery is losing basket size
Grocery Outlet pulled in more shoppers and less money per trip. Comparable store sales rose 0.5% on a 2.4% increase in transactions, offset by a 1.9% drop in average transaction size.
Profitability moved with the basket. Adjusted EBITDA, a rough proxy for operating cash earnings, fell to $59.4M from $66.7M a year earlier, and gross margin slipped to 30.0% from 30.4%.
CEO Jason Potter credited the quarter to better execution of the chain's opportunistic buying, the practice of snapping up surplus name-brand inventory cheaply.
Experiences keep their pricing
At the other end, spending on going out held up. StubHub lifted gross merchandise sales 7% to $2.62B, with revenue of $502.0M and adjusted EBITDA up 84% to $124.1M.
Shake Shack grew total revenue 15.2% to $423.3M, with same-Shack sales up 2.5% and restaurant-level profit of $91.7M. The chain opened 21 new company-operated locations in the quarter.
Discretionary Spenders Outgrew Grocery Value in the Third Quarter
Q3 2026 year-over-year revenue growth, %
Bar chart. Grocery Outlet: % Growth 0.90%. StubHub: % Growth 7%. Shake Shack: % Growth 15.20%.
Source: Company earnings releases
The monthly bill is where the cuts land
Charter Communications shows the squeeze on the monthly bill. Legacy Charter lost 156K Internet customers in the quarter, worse than the 109K it shed a year earlier, and is now targeting $2B in annualized expense savings.
Food and energy did the damage
The October consumer price index rose 0.4% on a seasonally adjusted basis, following a 0.6% gain in September. Core prices, which strip out food and energy, rose 0.3% for the third month running.
Food climbed 0.5%, and energy rose 0.7% over the month. Shelter added 0.3% and accounted for more than 30% of the all-items increase.
Beef prices rose 0.9%, and electricity rose 0.9%. Those are the line items that shrink a grocery basket before they touch a concert ticket.
Why the bond market makes this worse
Treasury yields jumped after the inflation data. The 10-year note traded above 5% before easing back to 4.992%, the 30-year reached 5.352%, and the 2-year surged to 4.736%.
The 10-year sets the tone for mortgages, car loans, and credit card rates. Every move higher trims what households have left after fixed costs.
Long Yields Sit Above 5% Across the Curve
US Treasury yields by maturity, Nov. 10, 2026, %
Line chart. Yield (%). 2-year: Yield (%) 4.74%. 10-year: Yield (%) 4.99%. 30-year: Yield (%) 5.35%.
Source: Source: CNBC
Fed Governor Christopher Waller told a Bank of England conference that a 50 basis point hike deserves consideration in December if inflation keeps running hot. Markets have largely priced a quarter-point hike for that meeting, according to the CME Group's FedWatch tool.
Goldman Sachs Asset Management's head of multi-sector fixed income investing, Lindsay Rosner, sees the tightening running longer than this year.
Where the exposure sits
The companies holding both traffic and price are selling one-off experiences rather than recurring monthly commitments. StubHub raised its full-year gross merchandise sales outlook to a range of $10.175B to $10.375B and cut net leverage to 2.5x trailing adjusted EBITDA from 4.5x at the end of 2025.
Shake Shack's adjusted EBITDA reached $62.8M, up 16.0% year over year, with system-wide sales of $644.8M.
Subscription and staple businesses are absorbing the hit instead. Charter's pro forma revenue fell 1.5% to $16.5B, and monthly residential revenue per customer dropped 1.6% to $117.85.
Grocery Outlet trimmed its full-year adjusted EBITDA guidance to a range of $225M to $229M from $225M to $235M, while nudging its comparable sales forecast up to a 0.2% to 0.4% increase.
The trade-down trade has an obvious off switch. If the Fed skips December or energy prices keep sliding, the squeeze on the lower half eases, and the discount and broadband names get a reprieve. Neither outcome is in the market's base case today.
