Holiday Retail Sales Off To A Strong Start: 5 Great Picks

This means that retail numbers for the first half of the holiday shopping season are on course to match the NRF’s forecast. These figures exclude the impact of auto, gas station and restaurant sales.

Coming back to the Commerce Department numbers for November, unadjusted retail sales increased 4.2% year over year. Service station sales plummeted 2.3%, the largest drop since 2017. According to the Energy Information Administration, gas prices have declined to 40 cents per gallon since October, leading to the slump in gas station receipts.

Headline sales numbers were powered by a 2.3% surge in online sales. Sales at furniture and home furnishing stores increased 1.2%. Electronics and appliance stores reported a 1.4% rise in sales. Auto sales, which account for around 20% of all retail sales, inched up 0.2%. Sales at department stores and miscellaneous store retailers each increased 0.4%.  

Our Choices

November’s increase in retail sales indicates that consumer spending has retained sufficient steam during the fourth quarter. This in turn is being supported by a robust labor market with jobless claims falling to a 49-year low last week.

These trends are also likely to continue supporting the economy in the near term. This is why it makes sense to invest in retail stocks, especially the categories that have gained substantially last month. However, picking winning stocks may be difficult.

We have narrowed down our search to the following stocks:

Asbury Automotive Group, Inc. (ABG - Free Report) is one of the largest automotive retailers in the United States.

Asbury Automotive carries a Zacks Rank #1 (Strong Buy) and has a VGM Score of A. The company has expected earnings growth of 28.7% for the current year. The Zacks Consensus Estimate for the current year has improved 1.1% over the last 30 days.

Ingles Markets, Incorporated (IMKTA - Free Report) is a leading supermarket chain with operations in the southeastern United States.

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