The retail industry witnessed a sharp rise in sales in the first half of 2021. With continued progress on the vaccination front, the industry should see solid holiday sales. Irrespective of near-term positives, the fundamental strength of retail stocks Costco Wholesale Corp (COST), BJ’s Wholesale Club (BJ), and Casey’s General Stores (CASY) makes them solid long-term bets.The retail industry had to undergo several rearrangements to remain operational last year. However, with most of the population being vaccinated with at least one dose, brick-and-mortar stores have seen rising foot traffic. The U.S. Census Bureau reported a 15.1% year-over-year rise in retail sales in August.
Moreover, the National Retail Federation (NRF) upgraded its retail sales growth forecast to between 10.5% to 13.5% for this year. The retail industry’s solid comeback in 2021 is evident as the SPDR S&P Retail ETF’s (XRT) has a year-to-date gain of 40.4% versus the broader SPDR S&P 500 ETF’s (SPY) 14.8% return.
In addition to the short-term support from the upcoming holiday season and rising foot traffic, the fundamental strength of prominent retail stocks such as Costco Wholesale Corporation (NASDAQ:COST), BJ's Wholesale Club Holdings, Inc. (BJ), and Casey's General Stores, Inc. (NASDAQ:CASY) make them solid long-term bets.