Look to These Five Retailers to Bring Holiday Cheer - Sachse Construction
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Look to These Five Retailers to Bring Holiday Cheer

Investors have every reason to expect that this holiday season will be even better for retailers than the last one. Low unemployment, rising wages and strong consumer confidence provide prime conditions for spending. The calendar is ideal, too, with Thanksgiving coming early and Christmas coming late. Finally, with many chains no longer in business, the remaining retailers have more business to pick up.

Toys “R” Us, Sports Authority, RadioShack, The Bon-Ton, Payless Shoes, H.H. Gregg, The Limited, Gymboree, and Gander Mountain have all disappeared from the retail landscape. On top of that, others like Sears and J.C. Penney are in retreat. That is good news for the retailers still standing. But even among these, investors can expect to see winners and losers. Here are five that may win big:

Target has made massive investments, remodeling its stores at the same time that it has invested in its e-commerce capabilities. Those are the right moves in the digital era, when consumers want the flexibility and convenience of both brick-and-mortar and online shopping. In the wake of Toys “R” Us’s demise, Target has also increased its square footage for toys. It is expected to take the largest share of toy sales from the shuttered toy specialist, according to industry experts.

Walmart will also be a top-three winner in toy sales, vying with Target and Amazon. Its toy department was already strong before America’s leading toy retailer exited the game. On top of that, the job and wage increases of the last year have largely gone to the sort of consumers who shop at Walmart. Their holidays will be better—as will the retailer’s, which has been riding 40% growth in its e-commerce sales.

Lowe’s isn’t the most obvious stop for holiday shopping. Its biggest season is in the spring, when consumers take to home-improvement projects. But Christmas is its second-biggest, and the store is the go-to place to find gifts for men. That will be enhanced this year by its acquisition of exclusive rights to Craftsman tools, which used to belong to Sears. As Sears disappears from the retail landscape, Lowe’s also has been taking market share in the appliances category. Consumers buying power tools might also find themselves adding more kitchen appliances to their baskets.

Macy’s is the most underestimated retail operation out there, according to an industry expert. The company has made moves to improve its margins, including closing unprofitable stores and improving its inventory management. Its holiday surge may mostly come not from its own efforts but from the failure of its competitors. Some 300 department-store branches that previously competed with Macy’s stores have shut their doors in the last year. Those consumers are very likely to wander over to Macy’s instead.

Best Buy has long been a model for how to fight Amazon. It has made its stores do double duty as warehouses, speeding up shipping times and giving consumers the option to pick up online purchases in-store. At the same time, it has invested in its stores’ mini-shops by Samsung and Microsoft featuring specially trained sales staff able to offer insights consumers can’t find online. That its previous competitors, including RadioShack, Circuit City and H.H. Gregg, are all bankrupt doesn’t hurt either. Among national consumer-electronics retailers, Best Buy is the last man standing.


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