In 2019, retail sales
rose 3.6%, after about 5% gain in 2018 which marked the biggest increase in six years driven by the tailwind of tax cuts. The month of December, which is all-important to retailers due to the holiday season, saw a 0.3% sequential gain, after an upwardly revised 0.3% rise in the previous month and matching market expectations.
Against this backdrop, below we highlight a few ETF areas that may benefit from the spending pattern in the year 2019.
Gainers Online Stores
Online and mail-order retail trade jumped
0.2% sequentially in December and 19.2% year over year. In the whole of 2019, sales surged 13.1% year over year. Amazon.com Inc. ( AMZN Quick Quote AMZN - Free Report)
The Zacks Rank #3 (Hold) company is one of the largest online retailers. Its division Amazon Web Services (AWS) has become a dominant name in the cloud-computing market (read:
ETFs to Tap on Amazon's Record Holiday Sales). Amplify Online Retail ETF IBUY
The underlying EQM Online Retail Index utilizes a rules-based methodology to select a globally diverse group of companies with 70% or more of online and virtual sales. The fund charges 65 bps in fees (read
: Shop Online ETFs & Stocks for Black Friday & Beyond). Food Services & Drinking Places
Sales at these places grew 0.2% sequentially in December and were up 4.9% year over year. In 2019, sales surged 4.4% to about $770 billion.
Denny's Corporation DENN
This is one of the largest restaurant companies, operating in moderately priced restaurants. It comes from a favorable Zacks industry (placed at the top 36% of 250+ industries) (read:
6 Sector ETFs & Stocks to Watch on December U.S. Inflation). Invesco Dynamic Leisure And Entertainment ETF PEJ
The fund bets on a host of restaurant and entertainment companies. It has a Zacks Rank #3.
Food & Beverage Stores
Spending at food and beverage stores, which are primarily grocery stores, jumped 3% year over year to $777.0 billion in 2019. Sales from these stores gained 04% sequentially and 3.7% year over year.
The Kroger Co. KR
The Zacks Rank #3 company is one of the nation’s largest grocery retailers. It comes from a favorable Zacks industry (top 20%).
Consumer Staples Select Sector SPDR Fund XLP
The Zacks Rank #1 (Strong Buy) fund tracks the consumer staples sector of the S&P 500 Index. Beverages account for about 26% of the fund while 19.2% weight goes to Food & Staples Retailing and 17.9% weight is allocated to Food Products (read:
A Look Back At S&P 500 Sector ETFs in 2019). Health & Personal Care Stores
Spending at health and personal care stores rose 0.4% sequentially in December and was up 3.8% year over year. Sales gained 3.1% in 2019.
Procter & Gamble Company PG
It is a branded consumer products company which markets its products primarily through mass merchandisers, grocery stores, drug stores, department stores, distributors, baby stores, specialty beauty stores. The stock has a Zacks Rank #2.
The Obesity ETF SLIM
The underlying Solactive Obesity Index tracks the performance of global companies focusing on obesity-related diseases, weight-loss programs, weight-loss supplements and plus-sized apparel.
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