Consumption Still Rising in 2021 – Leveraging Retail


The following post was written and / or published as part of a collaboration between Benzinga’s internal sponsored content team and a Benzinga financial partner.

Despite the economic hardships plaguing much of the national and global economy, consumers have been spending more than expected this holiday season.

The National Retail Federation reported on Friday that holiday retail sales – a figure that tracks retail spending through November and December excluding restaurants, car dealerships and gas stations – increased by 8, 3% year over year in 2020.

Holiday sales increased in six of nine retail categories, according to the report, with online and other non-store sales (i.e. e-commerce, which grew 23.9%) led by building material and garden supply stores (up 19%) and sporting goods stores (+ 15.2%).

(It’s also worth noting that the Commerce Department, which tracks purchases made in stores, restaurants, and online, reported that U.S. retail sales fell 0.7% month to month. the other in December, below the estimate of 0.2%. The difference could be due to the high expectations of economists.)

Winners and losers

Recent reports from a number of retailers support the idea that e-commerce demand was extremely strong in the fourth quarter.

Target company (NYSE: TGT) reported that same-store sales for December were up 17.2%, but much of that growth was due to a 102% increase in digital sales for the period. Costco Wholesaler Corp. (NASDAQ: COST) had similar results. December comparable sales for the warehouse giant rose 10.7% while e-commerce sales rose 62.5%.

However, not all retailers were saved by online demand.

Big store Nordstrom Inc (NYSE: JWN) reported that holiday sales fell 22% despite a 23% increase in digital sales. Jewelers Signet rings (NYSE: SIG), the parent company of Kay Jewelers, Zales and other jewelers, said holiday sales did not increase year over year, despite a 60% increase in e-commerce .

In specialized retail, L Brands, Inc. (NYSE: LB) said comparable sales increased 5% across its business portfolio. This was due to a 17% increase at Bath & Body Works, which offset a 9% drop at Victoria’s Secret. Zumiez (NASDAQ: ZUMZ) said vacation sales only rose 1.7%.

Leveraging Retail

All of this to say that retail, at least its online iteration, is alive and well in the pandemic, and it is pushing merchants into commerce. This is evidenced by the recent performance of the Direxion Daily Retail Bull 3X Actions (NYSE: RETL), which hit a new all-time high in January.

Not only has RETL grown nearly 40% over the past month, but the fund has additionally received over $ 341 million in inflows during that time period, more than $ 100 million more than the next. nearest Direxion fund.

RETL provides three times the daily performance of the S&P Retail Select Industry Index and owns all the stocks mentioned above.

However, what has really motivated the fund in recent weeks is its exposure to several high-profile stocks. As of January 19, nearly 5% of the fund was made up of Magnite Inc (NASDAQ: MGNI), Flashing load (NASDAQ: BLNK) and Gamestop (NYSE: GME).

Consumerism is king

The bottom line is that the strong retail sales are a product of the fact that American consumers are in a fairly healthy position despite the global pandemic. Government measures, as well as the convenience of electronic commerce, have certainly helped to facilitate this trend.

All in all, these factors could still support strong online spending in 2021. And with another round of stimulus measures expected from the Biden administration, it’s not out of the question that bullish retailing could turn around. to chase.

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The foregoing post was written and / or published as part of a collaboration between Benzinga’s internal sponsored content team and a Benzinga financial partner. While the article is not and should not be construed as editorial content, the Sponsored Content team works to ensure that all information contained in it is true and accurate to the best of their knowledge and ability. research. This content is for informational purposes only and is not intended to be investment advice.


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