Discount retailers’ sales rebound with anxious shoppers seeking deals
Bloomberg
Value retailers are holding up against a broader spending pullback as persistent anxiety over the economy and a softening job market drive shoppers to seek out discounts and deals.
Even with holiday-spending growth seen slipping to a five-year-low, off-price retailers TJX Cos., Ross StoresBurlingtonLVMHMoet HennessyLouis VuittonTapestry
“Whenever we see consumers under pressure, we tend to see a flight to value,” Bloomberg Intelligence senior analyst Jennifer Bartashus said.
Cost-conscious consumers will continue to lend momentum to the yearlong sales recovery for discount retailers. Ross Stores and TJX, operator of T.J. Maxx and Marshalls
Despite the start of holiday sales promotions, US retailGilbert
The growing reluctance among households to spend on big-ticket items, however, is less likely to hurt retail chains such as Dollar Tree Inc., Five Below Inc. and Miniso
Five Below, which sells snacks and personal accessories to teenagers, is forecast to grow sales by 19% in the fourth quarter, up from an estimated 13% in the previous period. Miniso, which sells small electronics and toys, is also expected to see an acceleration in sales, rising an estimated 34% in the third quarter of 2023 and 45% in the subsequent quarter. Analysts see discount variety store operator Dollar Tree nearly doubling revenue growth to 13% in the fourth quarter compared to the average estimate for the previous three months.
To be sure, the value-seeking mindset among consumers will also aid big-box chains such as Walmart Inc., Target
“Those retailers have an everyday low-price stance,” she added.
The broader range of their offerings, however, will prove a drag on earnings comparisons due to the base effects of comparing against last year’s elevated food prices.
Quarterly revenue growth at Walmart is seen decelerating at least until the end of this year while Target’s sales are seen contracting in the third quarter before expanding 1.4% in the next. Dollar General, which sells more fresh produce than rival Dollar Tree, will see revenue grow 2% in the third quarter before shrinking 4.2% in the next.
