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5 Stocks That Brokers Love Despite Changing Retail Dynamics

The retail landscape has been witnessing a sea change with the focus gradually shifting to online shopping. This transition in consumer shopping pattern is compelling retailers to fast adapt to the changes in the ecosystem. Retailers now have no option left than to keep pace with the changing retail scenario or get eliminated.

With the digital transformation in shopping and consumers splurging online, store and mall traffic has been hit hard. As a result, most retailers including big-box ones are struggling to compete with e-commerce channels. They are being forced to trim their store count to focus more on an online model. Retailers are now focusing more on enhancing their omni-channel capabilities, optimizing store fleet and restructuring activities.

We note that U.S. retail sales in May recorded the steepest drop (down 0.3%) in 16 months. But sales at non-store retailers inched up 0.8% sequentially and increased 10.2% from the prior-year period. Kiplinger’s latest forecast shows that retail sales, excluding gasoline, are expected to jump 3.5% in 2017. The report further suggests that e-commerce sales are expected to increase 15% this year compared with 13% in 2016.

Looking Beyond Brick & Mortar

Evidently, technology is playing a major role and the perfect example of the same is the news of Whole Foods Market, Inc.’s (WFM - Free Report) buyout by Amazon.com Inc. (AMZN - Free Report) . Analysts are looking at this mammoth acquisition as an amalgamation between the online marketplace and physical stores that could bring a massive change in the retail industry going forward.

Amazon has been in the spotlight for the last few years, as changing customer patterns have made the retail industry more dependent on e-commerce. It had earlier announced its plan to acquire online retail platform Souq.com to tap into the Middle East...


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