A busy week of retail earnings revealed that American consumers are spending with value top of mind. It’s a trend that benefits two Club names well-positioned to sell the best inventory at competitive prices. Target (TGT), Walmart (WMT) and TJX Companies (TJX) reported very different second-quarter earnings results over the past few days that show cost-conscious consumers continue to spend on essentials and services but are more discerning on their discretionary purchases. Ultimately, as spending on services puts pressure on the dollars left to spend on discretionary goods, it’s more important than ever to have the right mix and offer shoppers value they can’t get anywhere else. That’s where Club holdings TJX and Costco (COST) shine. “We are in a period where people do not want to spend a lot of money on things and they want value,” Jim Cramer said Thursday during the Investing Club’s August Monthly Meeting . “The consumer wants to make every dollar go further than the old days, perhaps because they want the money to hit the road and see the world post-Covid,” he added. Consumer spending “remains elevated” to historic norms, said Matthew Shay CEO of the National Retail Federation in a CNBC interview Wednesday. People continue to spend in the experience economy on things like travel, leisure, hospitality, and dining, he noted. The rest of shoppers’ wallets is allocated toward “spending more on necessities and being much more deliberate on discretionary items,” he added. This is, in part, why retail sales for July came in better than expected, up 0.7% for the month. Shopping at clothing and clothing accessories stores increased by 1%. Elsewhere, sales at electronics and appliance stores dropped 1.3%. This disparity signals that certain discretionary goods categories are working while others are not. Retailers who have the right merchandise at the right price are likely to perform better than those who don’t. WMT YTD mountain Walmart YTD performance Walmart on…
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