U.S. shoppers to spend less this holiday season, but Amazon still stands to gain, Goldman Sachs says
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Amid mounting economic uncertainty this holiday season, nearly three-quarters of U.S. shoppers plan to spend less than or the same as last year, according to a new Goldman Sachs consumer survey. And Club holding Amazon (AMZN), a leading retailer for holiday sales and promotions, should be a top destination for American bargain-hunters. American consumers are being squeezed by persistent inflation, high interest rates and a broader economic slowdown, meaning many have less money in their pockets to shell out on gifts. Goldman Sachs expects total holiday retail sales to grow between 6% and 8% throughout November and December, compared with 13.5% growth during the same two-month period last year. That’s why many shoppers are likely to choose Amazon’s ecommerce platform for its regular deals, varied price points, extensive offerings and quick delivery times. Goldman’s analysis comes amid an uptick in consumer spending, with retail sales rising last month and inflation cooling , according to recent U.S. government data. At the same time, earnings at big U.S. discount retailers Walmart (WMT) and Target (TGT) this week showed Americans are prioritizing spending on staples like groceries over discretionary items like clothes. Goldman Sachs polled 1,000 U.S. consumers to gauge spending trends for holiday shopping this year. The survey results, released Friday, found 43% of respondents plan to spend less this season than last year, 23% expect to spend the same and 31% indicated they could spend more on holiday items than last year. Higher-income consumers are also likely to spend less this year, the survey found. “To date, U.S. consumer spending has remained resilient despite inflationary challenges,” Goldman analysts wrote in a note Friday. But macroeconomic pressures, along with a shift in spending from goods to services like dining out and travel, should compress holiday shopping and lead to slower ecommerce growth in the fourth quarter, the analysts said. Nonetheless, Amazon maintains “the largest share of implied holiday purchasing with 33% of consumers planning to spend the most at Amazon,” followed by Walmart. As consumers search for value, Goldman expects a “highly promotional environment” across online retail platforms, with consumers holding off opening their wallets until they find deals. Almost 30% of respondents surveyed by Goldman plan to complete most of their shopping during the annual Black Friday sales event on Nov. 26 — providing a “healthy backdrop” for Amazon, Walmart and Ross Stores (ROST), according to Goldman. Bottom line We agree with Goldman’s analysis that Amazon is one of the best-positioned players in the discount retail space to benefit from this year’s holiday shopping. Amazon has exhibited a flexibility to accommodate shifting shopping habits by offering deals like its Prime Early Access Sale event in October. We’ll be looking out for data on consumer trends this season to see how Amazon may be reaping the rewards. The company’s ability to effectively manage expenses is another swing factor we’ll be monitoring, as Amazon looks to restore its stock price, which has fallen more than 43% year-to-date. (Jim Cramer’s Charitable Trust is long AMZN. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Amazon signage is displayed outside of an Amazon.com Inc. delivery hub in the late evening of Amazon Prime Day, July 12, 2022 in Culver City, California.
Patrick T. Fallon | AFP | Getty Images
Amid mounting economic uncertainty this holiday season, nearly three-quarters of U.S. shoppers plan to spend less than or the same as last year, according to a new Goldman Sachs consumer survey. And Club holding Amazon (AMZN), a leading retailer for holiday sales and promotions, should be a top destination for American bargain-hunters.
