4 Retail Areas Set to Win in 2023 Holiday Season: Stock Picks

As we move toward the all-important holiday season, projections from market research firms are coming to the forefront. According to Mastercard SpendingPulse, U.S. retail sales (excluding automotive) will likely log a year-over-year increase of 3.7% during the holiday season, running from Nov 1 to Dec 24.

This projection indicates the resilience of American consumers, who have adapted to changing economic conditions. Michelle Meyer, U.S. Chief Economist at the Mastercard Economics Institute, noted that consumers are expected to navigate the season strategically, making choices aligned with their lifestyles.

Against this backdrop, below we highlight a few retail industries that could boast higher sales in the upcoming holiday season. These industries position Amazon.com AMZN, BJ’s Restaurants BJRI, GameStop GME and Ross Stores ROST as the prospective winners.

Diverse Shopping Experiences With Focus on e-Commerce

According to Mastercard, consumers are expected to embrace an omnichannel approach to shopping, which encompasses both in-store and online purchases. E-commerce is projected to increase 6.7% year over year, while in-store sales are expected to rise 2.9% year over year.

Against this backdrop, e-commerce stock Amazon.com AMZN should gain the most. AMZN sports a Zacks Rank #1 (Strong Buy). The stock has a good VGM Score of B.

Thriving Restaurant Industry

The restaurant sector is expected to maintain its winning trajectory with a year-over-year expansion of 5.4%, beating the growth rate of grocery sales (+3.9%). Consumers are likely to dine out or participate in communal meals, activities and festivities outside the confines of their homes.

Investors can bet on Zacks Rank #1 BJ’s Restaurants BJRI, which owns and operates a chain of high-end casual dining restaurants in the United States. The stock has a great VGM Score of A.

Tech-Focused Gifting

The demand for electronics, gadgets and gaming products is set to rise significantly due to the continued evolution of AI, immersive experiences and digital work environments. Furthermore, consumers who purchased gadgets during the pandemic may intend to upgrade to the latest models. Electronics’ sales are anticipated to rise 6.0% year over year during the holiday season.

Against this backdrop, Zacks Rank #2 GameStop GME appears a good pick. It is the world’s largest video game retailer. The company offers the best selection of new and pre-owned video gaming consoles, accessories and video game titles, in both physical and digital formats. The stock has an upbeat VGM Score of B.

Consumer Selectivity May Go Toward Value-Based Products

In a competitive holiday retail landscape thanks to high inflation and higher rates, consumers are expected to be discerning and value-oriented in their choices. Discount store retailer Ross Stores ROST operates as an off-price retailer of apparel and home accessories, primarily in the United States, may come across as an intriguing pick. The stock has a Zacks Rank #2 and a VGM Score of B.
Amazon.com, Inc. (AMZN): Free Stock Analysis Report

BJ’s Restaurants, Inc. (BJRI): Free Stock Analysis Report

Ross Stores, Inc. (ROST): Free Stock Analysis Report

GameStop Corp. (GME): Free Stock Analysis Report

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