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There’s a stock ‘pick-up’ in the retail sector - YouTube
Channel: Fox Business
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Rising retail inventories could mean
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deep discounts for consumers is now the
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time to purchase that big ticket item
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you've been eyeing we're going to jump
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on holiday shopping and which retail
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stocks are good buys right now joining
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me now telsea Advisory Group CEO and
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chief research Officer Dana telsey Dana
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is always good to talk to you but it is
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really great to talk to you live and in
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person finally exactly thank you and on
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the first day of your new studio so
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congratulations thank you for having me
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here we wanted you to inaugurate it so
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let's start I guess at the top of the
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funnel Supply chains I'm hearing all
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sorts of contradictions the Wall Street
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Journal reported that the cost of
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transporting goods has fallen 4X and yet
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it's still way more expensive than it
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used to be that it's it you know we're
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getting stuff from China faster but it's
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still 100 days versus 50 back in 2019.
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what are you seeing in the uh in the
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supply chain disruption is continuing in
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the supply chain there's no doubt about
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it I think orders are now coming in that
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were placed a while ago so it's leading
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to a mismatch in terms of time timing of
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what the goods are for and when they're
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arriving I think some of the new Goods
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you're having lead times continuing to
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be placed earlier but as you mentioned
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we are seeing a bit of a reduction in
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the cost of ocean Freight that's coming
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in and some companies are still using
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air freight because they want the goods
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as soon as possible to try to maximize
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full price sales but that's really
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expensive uh so let's take so you got
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the supply chain now you go to
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inventories you walk through a Target on
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the one hand I'm reading that they
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bought too many TVs too many appliances
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so we'll see sales but you walked out
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another aisle in this it's bare what's
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going on I think inventories are
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starting to heat up one beginning to
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hear of order cancellations from some of
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the wholesale customers and some
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companies are beginning to pack and hold
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some of the goods that have arrived
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already I think in the apparel World
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we'll have a promotional back to school
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season given the increase in the number
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of in the amount of inventories so that
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sounds like good news for Shoppers what
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are we seeing in terms of price
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increases or could there be such thing
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as a decrease in stationary times on
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average most prices are going up at
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least mid single digits to low double
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digits and it's not just the cost of
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supply chain and Freight but also the
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cost of raw materials like cotton and
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we're going to continue to see price
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increases we go as we go through the
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back half of the year but it certainly
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means a bifurcation because that lower
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income consumer who's now lacked the
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stimulus that they received last year is
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pulling back on spending and meanwhile
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you you notice the opposite trend on
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Wealthy consumers which is that they are
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keeping up with their spending so that
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suggests another bifurcation which is in
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which retailers are going to benefit and
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which ones are going to get hurt right
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exactly and one of the things on the
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wealthy consumers that everyone watching
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closely is they're correlated to the
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stock market the volatility in the stock
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market look at the first half of the
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Year s p consumer discretionary was down
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in the index by over 30 percent also the
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retail ETF down by over 30 percent so
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that'll be watched closely too but when
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you think about the stocks you're
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certainly seeing some of the the
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essentials still work you take a look at
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Costco and the demand for Costco with
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the value that they can offer you look
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at Kroger on the supermarket side and
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let's face it we're back in person now
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so Estee Lauder on makeup you're seeing
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that recovery and makeup and and fancy
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your clothes right people are getting
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out of sweatpants and putting on clothes
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to go to the office or a party or
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wedding well you've known those no those
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numbers on weddings are big 2
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's million weddings expected this
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average of nearly 2.1 million a year so
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in this point in time occasion wear is
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here anxious to see the planning as we
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go through the remainder of 2022. now
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Costco is interesting because not only
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do the lower end consumers go there to
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get the deals but it's known for
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attracting some wealthy people too and
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it's got a Tailwind of everybody wants
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cheaper gas so are there other companies
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like that a TJX that sort of does well
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with both ends yeah we think Jax is
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going to do well also I think one of the
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things we're seeing with off prices
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they're going to be a beneficiary of
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these inventories that are coming in and
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dislocated places and I think there
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you've been watching closely and placing
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their orders because more is still to
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come but the off-pricers will benefit
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certainly for their customers who maybe
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want to bargain more so than need a
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bargain so that's a really interesting
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Dynamic so with the TJX for instance
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when somebody over orders in one thing
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it can end up on the shelves there is
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that right exactly and that'll also
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benefit some of the outlet stores also
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as long as we have enough people going
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there given the gasoline prices that
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have risen but that's another Trend that
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you've seen you said a little bit of a
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pullback on those online sales and More
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Store traffic we are seeing a pickup in
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traffic everyone wants to engage in
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Social engagements and activities
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shopping is an activity and we're seeing
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whether it's friends going out to buy
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new dresses friends going out to get
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something to drink somewhere all of a
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sudden they're going into stores and
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buying things that they haven't had in
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in the past styles of updated sizes of
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change for people and The Innovation
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product is there so I'm seeing a pickup
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in traffic while a moderation in online
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spending you want to give us one more
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retailer that you think looks attractive
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right here Ulta if you talk about makeup
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you got to look at Ulta also Dana Tulsi
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thank you so much thank you very much
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