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4 Sector ETFs & Stocks to Win on March Retail Sales
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In March 2023, U.S. retail sales experienced a 1% sequential decline, better than market expectations of a 0.4% decrease. The latest data followed a downwardly revised 0.2% drop in February. This indicates that cost pressures and rising interest rates are negatively affecting consumer spending.
The largest declines were observed in sales at gasoline stations (-5.5%), primarily due to lower prices; general merchandise stores (-3%); building materials and garden equipment (-2.1%); electronics and appliances (-2.1%); clothing (-1.7%); motor vehicle dealers (-1.6%); and furniture (-1.2%). Sales at food and beverage stores marginally decreased by 0.1%, per tradingeconomics.
The so-called core retail sales, which exclude automobiles, gasoline, building materials, and food services, declined by 0.3%. Notably, consumer spending constitutes approximately 70% of the U.S. economy. As a result, any increase in consumer spending is likely to enhance the overall economic growth outlook or vice versa.
Below we highlight a few areas and the related ETFs & stocks that may benefit handsomely in light of March U.S. retail sales.
Winning Areas
Non-Store Retailers
Sales at non-store retailers rose 12.3% year over year in March following an increase of 9.2% in February. Sequentially, sales are up 1.9% versus 1.3% gains in the prior month.
ProShares Online Retail ETF (ONLN - Free Report) tracks the ProShares Online Retail Index is a specialized retail index that tracks retailers that principally sell online or through other non-store channels.
The Zacks Rank #1 (Strong Buy) Booking Holdings (BKNG - Free Report) has agreements with hotels, airlines companies, cruise ships, transport companies and vacation providers, which enable it to accept bookings on their behalf. Information on these offerings and customer reviews are available on the company’s owned or operated websites, thus helping customers take informed decisions.
Food Services & Drinking Places
Sales at food services & drinking places increased 13% year over year in March following an increase of 15.9% in February. Sequentially, sales are up 0.1% versus a decline of 1.6% in the prior month.
AdvisorShares Restaurant ETF (EATZ - Free Report) is a pureplay restaurant ETF. This ETF is active and does not track a benchmark.
The Zacks Rank #1 Chuy's (CHUY - Free Report) owns and operates full-service restaurants serving a distinct menu of authentic Mexican food.
Food & Beverage Stores
Food & Beverage stores’ sales gained 5% year over year in the month versus 6.1% increase in February. Sequentially, sales are down 0.1% in the month versus 0.8% gains in the prior month.
VanEck Retail ETF (RTH - Free Report) has considerable focus on Walmart. The fund follows the MVIS US Listed Retail 25 Index tracks the overall performance of companies involved in retail distribution, wholesalers, on-line, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers.
Zacks Rank #1 The Kroger Co. (KR - Free Report) operates in the thin-margin grocery industry.
Health & Personal Care Stores
In the month, the segment's sales experienced a 7.1% increase year over year compared to an 8.2% rise in February. On a sequential basis, sales saw a 0.3% uptick in the month, in contrast to a 1.1% gain in the previous month.
Consumer Staples Select Sector SPDR Fund (XLP - Free Report) looks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Consumer Staples Select Sector Index.
Zacks Rank #2 (Buy) Unilever plc (UL - Free Report) specializes in the production of branded and packaged consumer goods, encompassing food, detergents, and personal care products. The company also maintains a presence in the specialty chemicals sector. Unilever distributes its products globally.
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4 Sector ETFs & Stocks to Win on March Retail Sales
In March 2023, U.S. retail sales experienced a 1% sequential decline, better than market expectations of a 0.4% decrease. The latest data followed a downwardly revised 0.2% drop in February. This indicates that cost pressures and rising interest rates are negatively affecting consumer spending.
The largest declines were observed in sales at gasoline stations (-5.5%), primarily due to lower prices; general merchandise stores (-3%); building materials and garden equipment (-2.1%); electronics and appliances (-2.1%); clothing (-1.7%); motor vehicle dealers (-1.6%); and furniture (-1.2%). Sales at food and beverage stores marginally decreased by 0.1%, per tradingeconomics.
The so-called core retail sales, which exclude automobiles, gasoline, building materials, and food services, declined by 0.3%. Notably, consumer spending constitutes approximately 70% of the U.S. economy. As a result, any increase in consumer spending is likely to enhance the overall economic growth outlook or vice versa.
Below we highlight a few areas and the related ETFs & stocks that may benefit handsomely in light of March U.S. retail sales.
Winning Areas
Non-Store Retailers
Sales at non-store retailers rose 12.3% year over year in March following an increase of 9.2% in February. Sequentially, sales are up 1.9% versus 1.3% gains in the prior month.
ProShares Online Retail ETF (ONLN - Free Report) tracks the ProShares Online Retail Index is a specialized retail index that tracks retailers that principally sell online or through other non-store channels.
The Zacks Rank #1 (Strong Buy) Booking Holdings (BKNG - Free Report) has agreements with hotels, airlines companies, cruise ships, transport companies and vacation providers, which enable it to accept bookings on their behalf. Information on these offerings and customer reviews are available on the company’s owned or operated websites, thus helping customers take informed decisions.
Food Services & Drinking Places
Sales at food services & drinking places increased 13% year over year in March following an increase of 15.9% in February. Sequentially, sales are up 0.1% versus a decline of 1.6% in the prior month.
AdvisorShares Restaurant ETF (EATZ - Free Report) is a pureplay restaurant ETF. This ETF is active and does not track a benchmark.
The Zacks Rank #1 Chuy's (CHUY - Free Report) owns and operates full-service restaurants serving a distinct menu of authentic Mexican food.
Food & Beverage Stores
Food & Beverage stores’ sales gained 5% year over year in the month versus 6.1% increase in February. Sequentially, sales are down 0.1% in the month versus 0.8% gains in the prior month.
VanEck Retail ETF (RTH - Free Report) has considerable focus on Walmart. The fund follows the MVIS US Listed Retail 25 Index tracks the overall performance of companies involved in retail distribution, wholesalers, on-line, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers.
Zacks Rank #1 The Kroger Co. (KR - Free Report) operates in the thin-margin grocery industry.
Health & Personal Care Stores
In the month, the segment's sales experienced a 7.1% increase year over year compared to an 8.2% rise in February. On a sequential basis, sales saw a 0.3% uptick in the month, in contrast to a 1.1% gain in the previous month.
Consumer Staples Select Sector SPDR Fund (XLP - Free Report) looks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Consumer Staples Select Sector Index.
Zacks Rank #2 (Buy) Unilever plc (UL - Free Report) specializes in the production of branded and packaged consumer goods, encompassing food, detergents, and personal care products. The company also maintains a presence in the specialty chemicals sector. Unilever distributes its products globally.