Goldman Sachs said a new consumer survey pointed to a less pressured holiday spending backdrop than feared. The firm reported that 61% of surveyed consumers plan to spend the same or more on holiday gifts this year, which is a level up seven percentage points from a year ago. “However, enthusiasm for holiday spending appears to be increasingly bifurcated by income cohort whereas holiday spending plans appears to be consistent for lower income customers,” noted analyst Brooke Roach on the results.
“Importantly, this improvement in planned holiday spend is attributable to the middle and high income consumer. Among lower income households, plans were more consistent Y/Y.”
No great surprise, but Amazon (AMZN) and Walmart (WMT) polled again as the top holiday shopping destinations. Notably, Walmart (WMT) did pick up some ground on Amazon in comparison to a year ago. Best Buy (BBY) also stood as an outperformer in the survey of consumer holiday shopping plans. However, department store spending intention was soft again, with planned spending at Kohl’s (KSS) falling -1.2 percentage points year-over-year, while Macy’s (M) spending intention was flat from a year ago and Nordstrom (JWN) and JCPenney both inflected negative.
Overall, Goldman Sachs sees a healthy backdrop for retailers that offer the right product at a compelling value in channels that are increasingly favored by consumers. The firm’s Buy-rated stock calls that align with the new survey readings include Walmart (WMT), Best Buy (BBY), Costco (COST), Ross Stores (ROST), Burlington Stores, Kontoor Brands (KTB), and Amazon (AMZN).