There were many folks, including myself, who expressed concern about whether consumer spending will hold up this holiday season. But after very strong Black Friday numbers, it might be time for investors to take a serious look at some of the big retail stocks and electronics manufacturers that could benefit from a strong finish to 2011.
According to the National Retail Federation, shoppers spent a record $52.4 billion across the long Thanksgiving holiday weekend — up an impressive 16.4% from 2010. Even more impressive was a stunning 39% increase in online Thanksgiving spending — a trend that hints Cyber Monday sales today could blow the doors off, too.
Of course, that doesn’t mean everyone is doing well. It’s still a very difficult environment out there in the wake of the financial crisis and amid persistently high unemployment, so investors should be wary. Many folks doubt whether this trend is sustainable and think this is just a very good start to the season that will lose momentum.
So which companies are the winners from this holiday spending trend, and which stocks are set to fall behind? Let’s take a look:
Biggest Loser: Sears
What Best Buy (NYSE:BBY) and others gained, other retailers naturally had to lose. But one merchant perpetually getting squeezed out by the competition is Sears Holdings (NASDAQ:SHLD), which operates not just the namesake department stores but also 1,300 Kmart discount stores nationwide. Additionally, Sears produces Kenmore appliances — which, thanks to big competition from BBY and others, aren’t moving well during regular shopping hours, let alone during the holiday rush.
To top it off, serious cash flow problems have resulted in what can only be called as neglect for many run-down Sears locations — turning off shoppers in what already is a bitter fight for every nickel consumers have to spend these days. Even if shoppers continue to open their wallets like this for many months to come, it’s doubtful Sears will capitalize on the trend in the same way other retailers will.
Also Disappointing: Apple
True, sales at branded Apple Inc. (NASDAQ:AAPL) retail locations are not the bread and butter of this gadget maker. True, it’s online sales were strong again this Black Friday weekend, with Apple.com seeing double-digit growth over last year. But with the best retail sales per square foot and Apple’s website now ranking as the No. 3 online merchant in the U.S., you would think there would be tremendous potential for a Black Friday boom. Just think what the company could do with its “insanely great” products, deep discounts and loyal customers!