Retail expert Dana Telsey says this week signals the unofficial start of the holiday shopping season. She discusses major deals, the current state of the retail sector, and what shoppers and investors can expect in the coming months.

New York

A retail analyst has highlighted the launch of major sales events by Amazon, Walmart, and Target as marking the unofficial beginning of the holiday shopping season. While Target has underperformed and recently announced a new CEO, Amazon and Walmart are positioned to gain market share, especially as consumer interest in Amazon Prime Day has increased significantly.

Despite lower consumer confidence, retail spending has not declined, with off-price retailers like TJ Maxx and Ross Stores continuing to perform well. The analyst notes that the season is expected to see modest growth, largely driven by inflation and price increases, with promotions likely to impact retailer margins. Inventory management and the ability to offer new and desirable products will be key factors for success during this extended and competitive holiday period.

Retail analyst marks week as unofficial start of holiday shopping

And maybe you buy stuff while watching stuff. Well, Amazon certainly hopes so, and it's kicking off its big deal prime days tomorrow with Walmart and Target holding their own sale events this week. Target, obviously, the notable underperformer of the group, down more than 30% this year and announcing a CEO change. Let's bring in a retail analyst that knows or has forgotten more about retail than most of us have ever known. That is Dana Telsey, Telsey Advisory Group CEO and chief research partner. How was that for an intro? Thank you very much. Absolutely thrilled to be here. Well-deserved in-person. Thank you, thank you. What are, does this, okay, where do we start? Should we start with Target? Sure, there's a lot of work to do. They're coming to my conference tomorrow. You have a new CEO that's been appointed, promoted from within. You've got a consumer. Which people didn't like, by the way. Right, well, they didn't like this. They wanted like some slick outsider that might change things. Right, well, you need change. You look at the results lately, you need change. We have to see what that change is gonna look like. Especially when you have so much competition, whether it's from the off-pricers. You've got Amazon Prime Day today. Early indications of search interest for Amazon Prime Day. Pretty good, traffic up nearly 20%. Which is a big number. So for Walmart and Amazon, do you feel like this is sort of theirs to lose? It is, when you think about Walmart and frankly the share that they're gaining, Amazon, the ease with which it is, there's definitely share to gain. And especially what you're gonna see during this holiday season. Because we all know that these tariffs, price increases are coming steadily, not all at once. So where's the share gonna go? It's going to off-prices, it's going to Walmart, it's going to Amazon. We have to see what those companies that are enacting change, what can they deliver that's exciting. Now there's been a lot of concern with the consumer. Can you look at consumer confidence? Clearly that has been much lower than people expected. But it has not translated to retail sales. People are still spending. So how do you look at that when you look at retail over the next quarter or the next year here? Are people gonna keep spending, or at some point are they actually gonna pull back because of their confidence? Well I think you definitely look at it by income level. You're certainly seeing some of the lower income level trade down and trade down, whether it's to the off-prices or to the discounters. We've seen the luxury stocks, and we'll hear about it next week from LVMH, where luxury has been slower, given the price increases that have taken hold so many times. But overall, for this upcoming holiday season, it's an uncertain time. It certainly still feels like you're gonna have at least a low single-digit increase, a lot of it boosted by those price increases and inflation. Dana, when you look at this type of year, it makes me think inventories. Who's managed their inventories the best? Who's tried to get around tariffs? And when I think about inventories, I think about TJ Maxx and Ross Stores. Is TJ Maxx going to continue winning? Why do they do it better than everybody else? And why would you buy anything else if you've had that tariff monkey wrench thrown into the system right now? It seems like that's the best way to play going into the back half of the year. I think there's a lot of different ways to play. You can look at brands and who's doing new things in brands. Look at the strength of a Birkenstock. You look at TJ and the category diversification that they have with the buys that they get because of their relationships with vendors and brands. They get better deals because of where they can distribute their product, through their own, and basically they're an umbrella because they're lower priced than a lot of the department stores and other players out there. TJ Maxx is a winner. I think it continues to win. And I think off price overall. Let's see Burlington's comps too. Dan, it's shocking to me that this is the start of holiday shopping, but if- Is it? Well, I mean, she said it. It's the most- I don't listen to anybody I don't listen to Dana. Are there Prime Day songs? And if not, there should be. You're the man to write them. And Guy Daly somewhere is not happy that we're having this company. He's a grouchy guy. But ultimately, what is your sense of this holiday season? And weave in the fact that this is an extended season that's going to be tough to read. We have a consumer that might be tapped out, but we have promotion, promotion, promotion. And that to me says margins don't sound as if they're going to be as robust as we want. Well, third quarter is going to be tough on margins. We know that's a tougher quarter. And fourth quarter, is it going to be promotional? It always, there is a level of promotion out there. But those inventory levels, people wanted to bring in the lower cost goods. And those companies that for discretionary where there is newness, they'll be buys. You look at Levi's, we're going to get their earnings tomorrow night. Beyonce helps, wide leg denim jeans help. Wide leg denim, Steve. Oh, I love it. It's hot. It's working. It's selling through. It's hot, it's hot, it's hot, it's hot, it's hot.

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