Shopping for Investment Opportunity in Consumer Stocks

The busy retail season is in full swing, but what can investors make of the longer-term outlook for consumer stocks? Sophie Steel of BlackRock Fundamental Equities looks beyond the seasonalities to three factors that are reshaping the opportunities across consumer sectors.

‘Tis the season … for holiday cheer, gifting and, of course, spending. Estimates for 2021 suggest a spending surge: Households have generally built up savings during the pandemic and pent-up demand for products and services is set to be unleashed with greater-than-usual seasonal gusto.

U.S. consumers have underspent their “normal income” over the past 18 months, amassing savings that amount to $670 billion ― consumption power that is further supplemented by
$2 trillion in savings from federal stimulus.1

Yet even bigger changes are afoot in the character of the consumer and the trends likely to prevail in the years to come. Sophie Steel, Co-Head of the Consumer Industry Group within BlackRock Fundamental Equities, says in a recent BlackRock Bottom Line video : “We are at a turning point in the way consumers around the world are spending their time and money.”

She identifies three transformative trends reshaping consumerism across the globe: