Despite bleak consumer confidence, 51% of consumers expect to spend the same amount on gifts this holiday season compared to last year. 11% expect to spend more. This is according to 1000 consumers polled by Goldman Sachs.
63% of respondents plan on giving gift cards, while 56% plan on giving clothing. Gift cards and jewelry are expected to gain significant "gift wallet share", which is the percentage of total gift spending.
The "gift wallet share" for consumer electronics is up only 30 bp this year. Meanwhile, after declining 60 bp last year, the share of clothing is up 20 bp this year.
Based on the survey results, Goldman analysts Michelle Tan, Matthew J. Fassler, Adrianne Shapira and Michael Kelter believe that the TJX Companies, which include retail chains like T.J. Maxx and Marshalls, and American Eagle Outfitters are poised to do well in the holidays. Goldman has buy ratings on both stocks.
TJX Companies is expected to benefit from shoppers looking for a bargain and the slight recovery in clothing gift share. Meanwhile, American Eagle is expected to be a key destination for consumers who intend on focusing less on themselves and more on gifts for the family.
Now here’s a chart from the Goldman report that shows this Holiday’s "gift wallet share":
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