5 Top Retail Stocks Set To Surge In 2020 After A Solid 2019

The retail sector performed impressively in 2019 supported by a buoyant consumer environment marked by a solid labor market, rise in disposable income and an uptick in consumer sentiment. Meanwhile, the U.S. economy has lost its pace although it is growing for the 11th year on the trot. Nonetheless, several retail stocks skyrocketed in 2019. Some of those stocks still carry strong growth potential for 2020.

Retail Sector Shines in 2019

The Zacks defined Retail and Wholesale sector rallied more than 22% in 2019. Moreover, this sector has started 2020 from where it ended last year. Year to date, the retail sector has gained 2.34% and is currently in the top 7% of the Zacks defined 16 broad sectors.

Retailers have been benefiting from their concerted endeavors like product innovation, introduction of new styles, merchandise replenishment and store refurbishments and expansion to fuel sales.

Moreover, initiatives such as building omnichannel, coming up with loyalty and marketing programs, enhancing the supply chain and providing faster delivery options are aiding growth. Simultaneously, companies are investing in renovation and improved checkouts, and mobile point-of-sale capabilities to keep stores relevant.

Expectations of Strong Holiday Sales

Several research firms and investment banks have estimated that 2019-2020 holiday sales are likely to surpass market expectations. This indicates strong spending by Americans, which constitutes 70% of the country’s GDP.

According to Mastercard SpendingPulse, retail sales in the United States from Nov 1 to Dec 24 of 2019 rose 3.4% year over year. National Retail Federation envisions holiday retail sales to advance 3.8-4.2% this season (excluding automobiles, restaurants and gasoline). Online and other non-store sales are expected to grow 11-14%.

Bank of America expects holiday shopping season to see sales growth of up to 5%, after a strong month-over-month gain of 0.3% in December and 3.2% growth year over year. Moreover, data compiled by Deloitte indicates that holiday sales are projected to increase 4.5-5% between November 2019 and January 2020. Meanwhile, e-commerce sales are estimated to improve 14-18%.

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Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any specific ...

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