A new set of economic data this week revealed challenges that the retail sector incurred during the final months of 2021, including a larger than expected drop in retail sales on Friday.
In December, retail sales fell by 1.9%, the most in 10 months, as the retail sector weathered a mix of supply chain issues, staff shortages due to the Omicron variant, and inflation.
Even in this challenging environment and perhaps beyond the epidemic, one type of retailer may be poised to gain market share, JPMorgan retail analyst Matt Boss told Yahoo Finance Live on Thursday, a day before the latest retail numbers were released. The analysts believe that Americans' new penchant for wearing activewear and jeans every day could even surpass COVID - 19, as well as by wearing activewear and jeans a lot of the time.
Boss said that 1 retail theme that played out over the Pandemic was strong and could take market share after the epidemic and may actually take market share after the epidemic. You're seeing it here in the workplace. I think active and denim players come out of this in a stronger market share position with a larger total addressable market. Boss said that Under Armour UA could become a very interesting catch-up play within the athletic space, as could Levi's LEVI and American Eagle AEO. In light of record-high inflation, Boss noted that discount stores like TJ Maxx TJX Ross ROST and Burlington BURL may do well in the near future because the dollar will go further in those stores.
It's true that inflationary costs are a reality. He said that's also the case for the consumer. It's going to cost more money at the grocery store. Heating costs are higher. The value becomes king as you think about where the consumer is pressed. When retailers release their fourth quarter earnings in the next few weeks, we'll know more about the state of retail.
Bradley Smith is an anchor at Yahoo Finance.