For long-term investors in the US stocks, the recent trend in the shopping behaviour could be a factor to keep an eye on. In the backdrop of Covid-19-led restrictions, the online sales were expected to go up more than ever before. Data on July shopping indicated that more consumers have started reconsidering online ordering. The number of households that bought groceries online rose 5% month over month in July to 66.5 million, according to the latest survey Brick Meets Click, sponsored by Mercatus. The US online grocery market posted $6.7 billion in sales during July, a 1.4% decline from $6.8 billion in June, but well above pre-pandemic levels. July sales were more than three times higher than the $2 billion recorded in August 2019.
Though grocery retailers saw a pick-up with in-store shopping, a new wave of Covid-19 infections could drive some US consumers back online. Many expect the online buying, especially on the grocery front, to remain a mainstay for many Americans.
Walmart Inc. and Target Corp, which rank among the country’s top grocery retailers both in stores and online, reported strong in-store shopping in the quarter ended in July. With the fear of the Delta variant of Coronavirus, the online sales may see an upward boost in the coming months.
J & J Snack Foods (JJSF) and The Hain Celestial Group are the two other stocks to keep an eye on. J&J Snack Foods Corporation is an American manufacturer, marketer, and distributor of branded niche snack foods and frozen beverages for the food service and retail supermarket industries. The Hain Celestial Group (HAIN), headquartered in Lake Success, NY, is a leading organic and natural products company with operations in North America, Europe and India.
Consumer spending makes up about 70% of all U.S. economic activity, making retail numbers a closely watched indicator. According to LisaShalett, Chief Investment Officer, Wealth Management, “U.S. consumer confidence plunged earlier this month, with the University of Michigan’s consumer sentiment index falling from 81.2 in July to 70.2 in August—the lowest level in almost a decade. Then, a rash of weaker-than-expected economic data, including in retail sales, followed.”
While the fortunes of the online grocery and other shopping sales depend a lot on the overall consumer spend, it remains to be seen how it pans out over the long term. A silver lining for the sector is the pent-demand that may emerge once the economy opens up fully. Till then, accumulating stocks as and when they see a dip could be the way forward.
Disclaimer: The investing decision in these or any other stock should be taken on your own after carefully evaluating the business and other fundamentals of the company or after consulting one’s financial advisor. It is not a recommendation to buy, hold or sell in any of the stocks. Financial Express Online does not bear any responsibility for their investment advice.