JP Morgan retail analyst: We could see the 'best back-to-back' holiday season in more than five years

Key Points
  • Holiday shopping could be the "best back-to-back that the consumer's seen in five-plus years," J.P. Morgan retail analyst Matthew Boss says.
  • Global, national and off-price brands such as Lululemon, Kohl's and Ross Stores could stand to benefit this season, he says.
  • Pick companies that have "value, convenience, innovation and pricing power," Boss says.
No. 1 ranked retail analyst on holiday shopping
No. 1 ranked retail analyst on holiday shopping

The American consumer, who is enjoying low unemployment and high confidence, has "the best backdrop we've seen in decades" for the holiday shopping season, J.P. Morgan retail analyst Matthew Boss told CNBC on Thursday.

"We think this holiday season could be the best back-to-back that the consumer's seen in five-plus years," Boss said on "Squawk on the Street." He said retailers can win not only on the top line but also on the margins.

Happy holiday shoppers could spend more than $1.1 trillion this year, according to an annual forecast by Deloitte. And it's online shopping that is expected to get the biggest boost. A recent Adobe Analytics report predicted online spending growth is expected to outpace that of storefront spending 14.8 percent to 2.7 percent.

In a retail industry that has been adjusting to the divisions between brick-and-mortar and digital business, e-commerce has been "driving a lot of intersection," Boss said.

"I think you want to be positioned with value, convenience, innovation and pricing power," he added.

The consumer conditions are good for global fashion and clothing brands such as Lululemon, Ralph Lauren, VF Corp. and PVH Corp., he said.

"You want companies that are in control of their own destinies from a distribution standpoint," Boss said.

There has also been a "move towards national brands" and department stores such as Kohl's where a "trade-up dynamic" exists," he noted.

"We're seeing trading up within stores, particularly at the department stores, to higher price, more full price," he said. "We're seeing discounting reduced in many cases. It's been a key theme on a number of the different, more recent conference calls."

Yet, Boss said, pricing power is still in play as prices, wages and transportation costs continue to rise. This creates an opportunity for off-price retailers, such as TJX Companies and Ross Stores, and discounters, such as Dollar General and Five Below, he said.

Furthermore, the retail industry continues to face disruption as consumers have "so many more choices today." Boss predicted that more closures and bankruptcies are still to come and that off-price retailers stand to benefit.

"That also leads you back to those off-price retailers, which I'll even include Ollie's in there," he said. "It also points you back to the discounters."

— Reuters contributed to this report.