JPMorgan's Matt Boss on Retail Landscape: Off-Price and Best-in-Class Brands

Consumer Resilience and Retail Data

• 📊 Despite market downturns, retail fundamentals remain broadly on track.
• 💡 The higher-income consumer shows resilience with significant wealth creation since 2019, continuing to spend robustly.
• ⚠️ The lower-income consumer is also resilient, supported by multiple years of wage increases.

Shifting Consumer Behavior

• 🛒 Consumers are trading down towards dollar stores and off-price retailers.
• 🏆 Best-in-class brands are gaining market share from tertiary brands.
• 📉 While there's a wealth effect on the way down, checking accounts remain significantly higher than pre-2019 levels.

Navigating the Retail Playbook

• 🎯 The current consumer backdrop calls for a winners and losers setup in retail.
• 🛍️ For value opportunities, the focus is on off-price retail and the discount space.
• ✨ For broader opportunities, best-in-class brands are highlighted as key players, capable of taking shelf space and market share over multiple years.
• ⚠️ The retail sector is experiencing consolidation, with a significant number of physical stores becoming available.