Four ETF Sectors to Thrive Despite December’s Retail Sales Slowdown

New York: Retail sales in December didn’t quite hit the mark. They only grew by 0.4%, while experts were hoping for a 0.6% increase. November’s numbers were adjusted up to 0.8%, which is a bit of good news.

Year-over-year, sales were up 3.9%. If you take out auto and gas, the increase was just 0.3%, falling short of the 0.4% that was expected. Paul Ashworth, an economist, noted that this report is still strong enough to bump up GDP growth estimates for the fourth quarter to 2.9%.

So, what does this mean for investors? There are some sectors and ETFs that could really shine despite the slower retail sales.

First up, clothing stores saw a 1.5% increase in December. The SPDR S&P Retail ETF (XRT) focuses on U.S. retail stocks, with apparel making up about 20% of it. Dillard’s is also a solid pick, offering a range of clothing and accessories.

Next, miscellaneous store retailers had a great month, with sales up 4.3%. The VanEck Retail ETF (RTH) tracks a variety of retail companies, and Walmart is a standout here, evolving into a major omnichannel player.

Furniture and home furnishing stores also did well, with a 2.3% increase. The iShares U.S. Consumer Focused ETF (IEDI) targets companies in this space, and Home Depot is a big player with a vast range of home improvement products.

Lastly, food and beverage stores saw a modest 0.8% rise. The Consumer Staples Select Sector SPDR ETF (XLP) represents this sector well, and Kimberly-Clark is a key player, providing a wide range of consumer products.

So, while retail sales may not have soared, there are still some bright spots for investors to consider.