There are some retail brands that will always be in high demand. Walmart (NYSE:WMT), for example, will consistently remain a top competitor as long as it continues to be one of the most affordable places for consumers to buy the things they truly need. But there are plenty of retail stocks to sell right now that don’t fall into the must-have category for shoppers.

Providing products that are nice to have but aren’t necessities means these retailers are feeling the pain the most as consumers feel the effects of a stagnating economy. Regardless of whether the economy is strong based on quantifiable metrics, many Americans still feel their dollar doesn’t go as far anymore. This leads to a pullback on spending in categories that aren’t seen as necessary, and that is when companies like the three on this list go from good bets to retail stocks to sell. 

Leslie’s (LESL)

During the pandemic, there was a boom in pool building and upgrades. Stuck at home and with little to spend their money on, people were ready and willing to pour thousands of dollars into pool upgrades and repairs. But that excitement tapered off and consumers are now spending elsewhere or not at all. This shift directly impacted Leslie’s (NASDAQ:LESL), the largest retailer of swimming pool supplies and products in the U.S.

Mike Egeck, CEO of Leslie’s, summed up many of the challenges manufacturers faced in 2023. “Unfavorable weather, increased consumer price sensitivity and pool owners with an elevated level of chemicals left over from last year contributed to double-digit traffic decline,” he said. “In addition, we absorbed elevated distribution costs and increased product costs, which impacted our margins.”

Leslie’s initial public offering (IPO) in October 2020 initially capitalized on the pandemic-era spending on pools. But as of today, LESL stock is trading for 75% less than its opening price. Timing is everything, and the best time to buy Leslie’s would have been before the pandemic even started — had the stock existed at the time. Unfortunately, it doesn’t look like the pool industry will be bouncing back for the foreseeable future. LESL stock should definitely be on investor lists of retail stocks to sell.

Container Store Group (TCS)

Container Store Group (NYSE:TCS) is the kind of company that inherently can only thrive when times are good and the economy is strong. While the continued interest in aesthetically pleasing spaces has not necessarily declined, consumer’s budgets have. Container Store Group’s two largest brands are The Container Store and Closet Works, which offer storage solutions and custom closets, respectively. 

Ostensibly, big box retailers like Walmart and Target (NYSE:TGT) offer the same products as The Container Store but for substantially less money. While the atmosphere and experience of shopping at The Container Store may appeal to some, it is hard for consumers to justify spending the difference on luxury items when the cost of the products they have to buy has gone up so dramatically. 

Optimistic company executives believe the company’s “stock market valuation does not reflect its intrinsic value.” To that end, they are exploring the idea of selling the company. But who knows whether that will prove better or worse for the stock’s value. 

So far this year, TCS is down 71%. While it hit a high of $18.30 in early 2021, it has been on a steady decline since and is now trading at only 70 cents per share. The best time to sell this retail stock would have been years ago, but now is definitely the time to get out if you’re still holding on. Otherwise, plan on holding onto it for the long haul until the economy makes a substantial rebound. 

Ulta Beauty (ULTA)

Propelled forward in recent years by the beauty shopping habits of teenage girls, Ulta Beauty (NASDAQ:ULTA) had seen a wave of increased sales. But while annual spending on beauty supplies among the teenage demographic is up 8%, it remains to be seen whether that trend continues. 

The money teenagers are spending on themselves, according to self-reported data, is down 6% year-over-year (YOY). While parental contribution currently remains the same, a reduction in spending on their children’s discretionary products is likely right around the corner. Ulta’s CEO Dave Kimbell has warned that sales are starting to decline and the slowdown has been “a bit earlier and bit bigger than we thought.”

As for Ulta’s adult customers who buy beauty products for themselves, this demographic is pulling back on spending at the store, and turning to more affordable retailers like Target and Walmart. Or they’re choosing to go all in and splurge at Ulta’s competitor, Sephora, which is often seen as a more high-end shopping experience.

While ULTA is up 14% over the past five years, the stock is down 21% since January and 7.5% in the last year. If consumer discretionary spending continues to go down in the coming months, Ulta is definitely one of the retail stocks to sell now. 

On the date of publication, Philippa Main did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.