Bank of American Merrill Lynch analysts believe that holiday spending will decrease this year.
Tariffs are expected to play a major role in the projected decreased spending this holiday season. Tariffs should cause retailers to directly place this increased cost onto the consumer through raised prices.
Additionally, there has been an increase in online sales as that particular industry has grown. E-commerce sales growth has continually increased with the growth rate hitting 25% this year.
Additionally, analysts from BAML have identified retailers that will break this expected trend of decreased spending. Burlington stores is expected to do well this holiday season. This is because their inventory will be insulted from the expected prices shifts that could occur because of tariffs.
Only 6% of Burlington’s inventory is imported, and of that small amount the entirety is not all imported from China. Consequently, if competitors were raise their prices, Burlington’s inventory would be more appealing.
Target is another retailer that is expected to do well this holiday season. Target’s ability to quickly ship its available inventory to online customers makes it well poised to take advantage of the e-commerce’s impressive growth rate. Warm weather is also expected to decrease over all consumer spending.