Discount department stores are emerging as winners from the GFC, as shoppers seek out cheaper shopping alternatives and look for better value when spending their government stimulus package payments.
Wesfarmers is seeing the benefits in their Kmart and Target sales figures, which are outperforming the more upmarket stores like Myer and David Jones. Woolworths Big W stores have also seen positive growth in the last quarter.
The trend is also being seen in the US, where Wal-Mart has reported a growing proportion of its demographic are shoppers on higher incomes, and 17% of the recent growth in store traffic is coming from new customers. The Wal-Mart chief believes the economic downturn has brought about a favourable change in consumer attitudes to discount stores, and in the types of products they are likely to buy.
Stocks for your watchlist:
- David Jones: DJS.AX (ASX)
- Wal-Mart Stores: WMT.N (NYSE)
- Wesfarmers: WES.AX (ASX)
- Woolworths: WOW.AX (ASX)
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