Right. So, the price of propelling oneself about in a metal box powered by controlled explosions has, shall we say, experienced a bit of an upward twitch. Roughly 27% since events unfolded in a region that, historically, has a complicated relationship with both oil and, well, everything else. It’s the sort of thing that tends to ripple outwards, like dropping a pebble into a rather large, rather interconnected pond of global commerce. (One imagines the pond is also populated by particularly judgmental goldfish.)
This, naturally, has prompted a few worried glances in the direction of inflation. Because oil isn’t just for driving; it’s in things. Lots of things. The stuff gets shipped around, which requires…you guessed it…more oil. It’s a self-referential system, really. A bit like trying to understand the instructions for assembling flat-pack furniture, only with significantly higher stakes.
On Wednesday, the Producer Price Index (PPI) – a measure of how much things cost before they get to you, the consumer – decided to be uncooperative. It rose 0.7% in February, which is considerably more than the rather optimistic predictions of 0.3%. January saw a 0.5% increase, and December 2025 a perfectly respectable 0.4%. The annual figure? A brisk 3.4%. (One wonders if the PPI has a tiny, internal accountant who just enjoys making these numbers go up. It wouldn’t be entirely surprising.) Core prices, stripping out the usual suspects – food, energy, the existential dread of trade services – chimed in with a 3.5% increase. Wholesale prices, it appears, are signaling that retail prices are about to get a bit…assertive.
The stock market responded with a mild shudder on Wednesday. But the real fun, it seems, may be yet to come. The February data doesn’t fully account for the recent surge in oil prices. And, as if that weren’t enough, fertilizer prices have also decided to join the party, which suggests that the cost of growing things – a rather fundamental activity, one would think – is about to increase. (One begins to suspect a conspiracy involving sentient vegetables.)
In times like these, it’s often suggested that one should consider investing in ‘inflation-proof’ stocks. A curious term, really. As if a stock could somehow develop an impervious shell. Nevertheless, there are certain businesses that seem better equipped to weather these particular storms. We’ve been having a look at a couple.
1. AutoZone
Very few companies thrive when everyone else is feeling a bit… pinched. AutoZone, however, is one of them. It’s countercyclical, which means it does better when the economic cycle is doing worse. (A sort of perverse symbiotic relationship. It’s almost admirable.)
The logic is beautifully simple, if a little depressing. When people can’t afford a new car, they tend to keep their old ones running. And that requires parts. And repairs. And someone to do the repairs. AutoZone provides the parts. It’s a beautifully reliable system, predicated on the slightly melancholy truth that most people can’t afford to simply replace things when they break. (It’s a bit like the universe itself, really. Constantly recycling.)
Over the years, AutoZone has proven itself to be a remarkably efficient operator, alongside its rival, O’Reilly Automotive. The stock has risen over 300% in the last decade, and a staggering 10,000% since its IPO in 1991. It’s not a high-growth story, perhaps, but it’s a story of steady, reliable returns, boosted by a consistent program of share buybacks, which have reduced the number of outstanding shares by nearly 50% over the last decade. (A bit like a magician making shares disappear. A perfectly legal trick, of course.) Recent quarterly results showed comparable sales growth of 3.3%. If inflation does indeed return with a vengeance, AutoZone looks well-positioned to benefit.
2. Dollar General
When times are tough, people tend to ‘trade down’. They seek out cheaper stores, cheaper products, and generally try to make their money go further. And few retailers benefit from this behavior more than Dollar General. With over 20,000 locations across the US, it’s the nation’s largest retailer by sheer number of stores. (A truly impressive logistical undertaking. One imagines a vast network of tiny, determined trucks.)
Dollar General was already seeing the benefits of this trend last year, as a weakening labor market and new tariffs put pressure on consumer spending. The stock rose a remarkable 75% last year, and that momentum could accelerate if inflation returns. (It’s a bit like watching a small, determined snowball gathering speed as it rolls down a hill.)
The company’s recent performance has been strong. Turnaround efforts, including improvements to distribution and store-level issues like out-of-stocks and slow checkouts, are starting to pay off. Comparable sales rose 3% and accelerated over the course of the year, while margins improved as inventories fell 7%, allowing the company to avoid the dreaded markdowns. (A fate worse than economic downturn, one suspects.) Investors were a little disappointed with 2026 guidance, which calls for comparable sales growth of 2.2%-2.7%, but that may simply be a touch of conservatism at the beginning of the year. Dollar General plans to open 460 new stores in 2026, as well as remodel over 2,000 existing ones. Based on current guidance, the stock trades at a forward P/E of less than 18. If inflation does indeed make a comeback, this discount retailer looks poised for another strong year.
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2026-03-19 05:32