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Retail Rally Is Real Deal

Friday, 5 Nov 2010 | 7:03 PM ET
Cramer Does His Homework
Cramer grades VirnetX Holding (VHC), RealD (RLD) and Polypore (PPO).

It seems the super rich and the very poor have fueled a run in retail since the market started its rebound in early 2009. The two have made up our “barbell economy,” Cramer said, but now he’s wondering if it’s time for the mid-level to make its move.

This earnings season we’ve seen strong results from both the high and low end. Tiffany , Whole Foods , Coach and Williams-Sonoma have delivered outsized profits right along with Family Dollar and Dollar General . Whether shopping for designer bags or with food stamps, these two cohorts are in the stores.

That leaves room for the next leg of retail to rev up, Cramer said. These are the “not-so-rich-but-with-money-in-the-market” people who shop at Target and Macy’s . This group, the stores with moderate pricing, is what will run next.

It started with the rich, and the trade-down shoppers drove sales for this sector as well, but after Friday’s positive jobs number, Cramer thinks every retailer will follow their lead.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

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