Retailers are announcing steeper than ever discounts as they prepare for the holiday shopping season. Many stores will be open for longer hours than earlier years; and some will be open on the Thanksgiving day for the first time.
The shopping season is shorter this year and the competition is more intense as retailers battle for consumers’ dollars. Many retailers have warned about the impact on margins as they try to keep pace with their competitors’ promotions.
Retail sales numbers released yesterday clearly indicated consumer spending may not be bad this holiday season. High-end segment of retail in particular is doing quite well, though the low end still remains somewhat challenging.
A rising stock market and higher home prices have resulted in a “wealth effect”, encouraging consumers to spend more. A healing labor market and cheap gas prices have further boosted their ability to spend.
I think that this will be an excellent holiday shopping season for consumers but a challenging one for some retailers with increasing pressure on their margins.
Do you think that shoppers will emerge as the winners in the price war between retailers this holiday season?
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>