Shoppers Spend Widely to Aid Holiday Retail Sales & E-Commerce
Per Mastercard’s MA latest SpendingPulse report, consumer spending beat low sales expectations this holiday season, courtesy of the surge in online shopping. Total retail sales (ex-auto) expanded 3% from the year-ago level during the extended 75-day holiday period from Oct 11 through Dec 24. During the traditional holiday period, running from Nov 1 through Dec 24, sales inched up 2.4% from the same period last year.
Going by the global payment company’s data, which showcases overall spending trends across all payment types, e-commerce sales boomed, reflecting a year-over-year uptick of 49%. E-commerce accounted for 19.7% of all retail sales compared with the year-ago figure of 13.4%.
“American consumers turned the holiday season on its head, redefining ‘home for the holidays’ in a uniquely 2020 way. They shopped from home for the home, leading to record e-commerce growth,” reckons Steve Sadove, senior advisor, Mastercard.
Digging into the data further, total furniture & furnishings retail sales during the extended season rose 16.2% year over year with online sales jumping 31%. While home-improvement sales witnessed an increase of 14.1%, digital sales soared 79.7% from the 2019 reading. Demand for grocery and electronics & appliancesremained elevated as well with both recording total retail sales growth of 6.8% and 6% each.
Apparel and luxury experienced the weakest performances with total retail sales declining 19.1% and 21.1%, respectively. Meanwhile, shoppers still seem averse to go back in-store and shop. Although total retail sales at the department stores category dropped 10.2%, the sector’s digital sales grew 3.3%, thereby underscoring the importance of omnichannel strategies. Options of digital shopping, in-store pickups and contactless technologies were key to retailers’ success.
Best Buys
The pandemic-fueled online spending is here to stay. Retailers that are leveraging technology with a strong online presence amid this chaotic environment are likely to brave this crisis and ultimately emerge as winners.
Given the booming trends, we narrowed down our search to five stocks for a lucrative investment portfolio. Each stock currently has a Zacks Rank #1 (Strong Buy) or 2 (Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
B&G Foods, Inc. BGS manufactures, sells and distributes high quality, shelf-stable, frozen food and household products across the United States, Canada and Puerto Rico. The company boasts a diversified portfolio of 50 brands, many of which grab a plum slice of the market in different regions. The company has a trailing four-quarter earnings surprise of 9.28%, on average. It is presently a #1 Ranked player.
Sprouts Farmers Market, Inc.SFM operates in a highly fragmented grocery store industry with focus on product innovation, emphasis on e-commerce, expansion of private label assortment and enhancement of technology. The company has a trailing four-quarter earnings surprise of 59.50%, on average. The company is presently a #2 Ranked player.
Etsy, Inc.ETSY offers e-commerce services and provides both online and offline marketplaces to buy and sell goods. The company's product line comprises art, home and living, mobile accessories, jewellery, wedding merchandise et al.It has a trailing four-quarter earnings surprise of 23.52%, on average.The company carries a Zacks Rank #2 at present.
LaZBoy Incorporated LZB is one of the world's leading residential furniture producers. Domiciled in Monroe, MI, this American entity manufactures residential furniture, ranging from upholstered recliners to sofas, stationary chairs, lift chairs and sleeper sofas. The company has a trailing four-quarter earnings surprise of 76.40%, on average, and currently has a Zacks Rank of 2.
Wayfair Inc.W, headquartered in Boston, MA, is one of the world's leading online sellers of home products, consisting of furniture and home decor. It operates worldwide through Wayfair.com and four other branded websites namely, Joss & Main, AllModern, Birch Lane and Perigold. Over the past 60 days, the stock has seen the Zacks Consensus Estimate for 2021 earnings being revised 75.6% upward. The company presently holds a Zacks Rank of 2.
Zacks Top 10 Stocks for 2021
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Mastercard Incorporated (MA) : Free Stock Analysis Report
LaZBoy Incorporated (LZB) : Free Stock Analysis Report
B&G Foods, Inc. (BGS) : Free Stock Analysis Report
Wayfair Inc. (W) : Free Stock Analysis Report
Etsy, Inc. (ETSY) : Free Stock Analysis Report
Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report
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