Talking Numbers

Here’s what will save retail this Christmas: Strategists

Here's what will save retail this Christmas: Strategists

Customers may have been fighting each other over store sales this past weekend. But, they weren't spending as much. According to the National Retail Federation, Thanksgiving weekend store traffic was up 27% from last year. However, total sales were $57.4 billion, a drop of nearly 3% from 2012. So, should retailers be worried?

Maybe not, says CNBC contributor Andrew Busch, editor and publisher of The Busch Update. The reason has to do with online sales. ComScore sees Black Friday's online shopping up 15% compared to last year. And, while stores may have opened earlier on Thanksgiving Day this year to compensate for the shorter 2013 shopping season, online Thanksgiving shopping was up 21% compared to last year. Shoppers may have avoided bedlam at the stores by pointing-and-clicking at home.

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But, besides avoiding long lines and potential violence, buyers are also drawn to shop online because it provides them more options to comparison shop. And, shoppers are also taking on new strategies for getting deals, according to Busch.

"Shoppers are being more choosey," says Busch. "They're going more for the discounts and they're doing a lot of things called 'mission shopping'. They go to a specific store for a specific discount. Once they get that, they turn around and leave."

Buyers aren't doing this solely because they like getting discounts; it's also out of necessity, notes Busch.

"The reason why they're doing this is because they don' t have as much money as they used to," says Busch. "Median income prior to the Great Recession was $57,000 in the United States. Now, it's $51,000."

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Meanwhile, Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson, sees retail stocks as continuing its bullish run. However, in looking at the charts for the ETF tracking retail stocks, the SPRD S&P Retail ETF (the XRT), he believes retailers will have a tough time outperforming the S&P 500 in the months ahead.

"This is a classic bullish stock charts which suggests upside remains in the short-term," says Ross, but his outlook for retail isn't as bright compared to the rest of the market. "I can see a case where the market continues to go higher but, on a relative basis, retail stocks start to underperform."

To see the rest of Busch's fundamental analysis and Ross' charts on the retail ETF, the XRT, watch the video above.

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