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Investors’ interest in the discount retail space is partly evident in the SPDR S&P Retail ETF’s (XRT) 137.8% gains over the past year compared to SPDR S&P 500 ETF Trust’s (SPY) 39.9% returns. As stores integrate data analytics into their management to streamline operations and enhance supply chain efficiency, it could lead to further growth in this space. According to Research and Markets, the global retail market is expected to grow at a 7% CAGR over the next four years.
Discount stores are expected to gain from the industry tailwinds because they offer a wide range of goods at lower prices. So, we think it is wise to bet now on Costco Wholesale Corporation (NASDAQ:COST) and Dollar Tree, Inc. (DLTR) because they are well positioned to generate significant returns in the near-term.
