Consumer confidence is up. Despite rumors of a big market correction coming, we are all going to spend more money on Easter this weekend than we have in years, the National Retail Federation predicts.
(You will find more statistics at Statista)
That doesn’t mean go out and buy consumer friendly stocks. That trade is on pause and RIAs should be prudent to watch how the next few days shake-out as big money investors continue with knee-jerk reactions on geopolitical hot spots in Syria and North Korea.
NRF thinks that Easter spending this year is going to be a record-breaker. And that is note-worthy, why? Because if this is a sign of things to come, a correction in consumer-centric equities is an opportunity for long-termers.
According to the NRF survey, Americans plan to spend upwards of $18.4 billion this year with 18% saying they plan to spend more than last year. The majority of survey respondents (72.4%) said they will spend the same.
The spending trend is on the upswing. Easter is indicative of that.
Easter spending peaked at a record breaking $17.2 billion in 2013 before falling for the next two years and rising to another record breaking $17.3 billion in 2016.
The usual purchases top the list from candy to food for Easter dinner.
One of the key takeaways from the report is were people are spending money. Easter is not like Christmas. This is very much a bricks-and-mortar operation. Over 58% said they will fill their Easter baskets with goods purchased at “discount stores”. Although they were not mentioed in the report, we can take that to mean companies like CVS (CVS 73,84 -0,53 -0,71%), Rite Aid (RAD 0,65 -0,13 -16,81%) Family Dollar Store, and Michaels (MIK 21,97 0,00 0,00%), to name a few here on the eastern seaboard.
Another 45.7% of respondents said they would be buying at “department stores”, which is safe to assume to mean Walmart (WMT 60,87 -0,58 -0,94%), Target (TGT 155,29 +2,37 +1,55%), Kohl’s (KSS 27,74 -0,13 -0,47%) and Costco (COST 749,44 +5,55 +0,75%) for people who really need a lot of chocolate!
Only 26.8% said they would be shopping online, an equal number to those saying they would be shopping at local/small businesses and specialty shops like gift stores and florists.