The holidays are approaching, and during this time of year the retail sector does over three-quarters of its business. But with estimated flat consumer spending, some retailers could be facing some issues. Without a rising tide in retail sales, damaged retailers like Sears Holdings Corp. (NASDAQ: SHLD) and J.C. Penney Co. Inc. (NYSE: JCP) could lose out to e-commerce powerhouses like Amazon.com Inc. (NASDAQ: AMZN) and other retail giants.
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The National Retail Federation released its Holiday Consumer Spending Survey, which estimates the average spending per consumer to be $805.65, just slightly over the previous year’s $802.45. The current reading is the highest one that the survey has recorded in its 14-year stint.
A key takeaway from this survey is that 46% of consumers plan to purchase their holiday goods online, and this figure has been steadily growing throughout the years. Out of the group that purchases goods online, 46.5% will buy online but pick up in store or have the item shipped to the store.
In order for these damaged retail stores to get ahead in this holiday season, they must secure a larger market share than in previous years. This is harder than it may seem with other domestic companies like Wal-Mart Stores Inc. (NYSE: WMT) crowding the space and able to discount practically any challengers to death.
In terms of e-commerce, Amazon is absolutely dominating and is the number one go-to site for many online consumers. Looking back to the survey, nearly half of consumer holiday spending will take place online.
As we’ve previously said, without a rising tide in the retail sector, struggling retailers will continue to fight an uphill battle against a brick-and-mortar giant on one hand and an e-commerce giant on the other.
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Shares of Sears were last seen trading down 0.7% to $24.16, with a consensus analyst price target of $9.00 and a 52-week trading range of $19.08 to $48.25.
J.C. Penney shares were relatively flat at $9.76, with a consensus price target of $9.76 and a 52-week range of $5.90 to $10.09.
Shares of Amazon were down 2.9% at $556.73, with a consensus price target of $649.74 and a 52-week range of $284.00 to $580.57.
Wal-Mart shares were flat at $58.80, with a consensus price target of $63.10 and a 52-week range of $58.37 to $90.97.
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