What is "The Great Retail Price Divide"?

The Great Retail Price Divide refers to the growing gap between retailers raising prices (like Amazon's recent 5% increase on everyday essentials) and those strategically lowering them (like Walmart and discount retailers). This price divergence creates opportunities for value-focused retailers to attract budget-conscious shoppers looking for better deals, potentially shifting consumer loyalty and market share in the retail sector.

How do discount retailers differ from traditional retailers?

Discount retailers operate on business models specifically designed to offer lower prices than traditional retailers. They achieve this through various strategies: buying in bulk, carrying limited inventory, offering private label products, operating in lower-cost locations, or specializing in closeout merchandise. Companies like Dollar General, Dollar Tree, and Ollie's Bargain Outlet focus primarily on providing value, while warehouse clubs like Costco and BJ's use membership models to offer lower prices on bulk purchases.

What are off-price retailers?

Off-price retailers like TJX Companies (T.J. Maxx, Marshalls), Ross Stores, and Burlington specialize in selling brand-name merchandise at 20-60% below department store prices. They purchase excess inventory, end-of-season items, or production overruns directly from manufacturers and pass the savings to customers. Unlike regular retailers that buy seasonal merchandise months in advance, off-price stores make opportunistic purchases throughout the year, allowing them to offer "treasure hunt" shopping experiences with constantly changing inventory at significant discounts.

How might Amazon's price increases impact consumer behavior?

Amazon's 5% price increase on essentials could trigger several changes in consumer behavior. Budget-conscious shoppers may comparison shop more frequently, shifting purchases to value retailers offering lower prices. Customer loyalty may weaken as price becomes a more important factor than convenience. Consumers might also consolidate shopping trips to warehouse clubs or discount chains to maximize value, especially for household staples. This behavioral shift could benefit the retailers in this stock group, particularly those with strong price positioning on everyday necessities.

What does "Dividend Yield" mean?

Dividend Yield represents the annual dividend payment amount divided by the stock's current price, expressed as a percentage. For example, if a $100 stock pays $2 in dividends per year, its dividend yield is 2%. This metric helps investors understand the income return they're receiving relative to the current stock price. Many established retailers in this group pay dividends, providing investors with regular income in addition to any potential stock price appreciation.

15 handpicked stocks

The Great Retail Price Divide

This collection of stocks represents retailers capitalizing on Amazon's price increases by offering better deals on everyday essentials. These companies were carefully selected by our analysts for their potential to attract budget-conscious shoppers looking for more affordable alternatives.

Han Tan | Market Analyst

Published on July 21

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

Walmart Inc.

WMT

Current price

$101.65

Walmart is actively cutting prices while Amazon raises them, positioning it to attract more price-conscious shoppers.

Costco Wholesale

COST

Current price

$916.34

Costco's membership model and bulk pricing strategy offers significant value compared to increasingly expensive online alternatives.

Target Corp.

TGT

Current price

$89.51

Target competes directly with Amazon across multiple categories while maintaining competitive pricing on everyday essentials.

Dollar General Corporation

Current price

$101.40

Dollar Tree, Inc.

DLTR

Current price

$90.24

TJX Companies, Inc., The

TJX

Current price

$142.49

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12 Month Growth Potential

Use the growth calculator to see how much investing in these assets could return over one year, based on aggregated analyst sentiment provided by Refinitive Ltd.

If you invested across these assets:

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In 12 months it might be worth:

$1,000.00

+8.74%

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About This Group of Stocks

Our Expert Thinking

As Amazon raises prices on essential goods by an average of 5%, discount retailers are strategically positioning themselves to capture price-sensitive consumers. This represents a significant shift in retail dynamics, where value-focused companies can potentially gain market share from higher-priced competitors.

What You Need to Know

This collection focuses on discount retailers, off-price apparel stores, and warehouse clubs with business models centered on providing value. These companies are directly benefiting from consumers actively seeking relief from inflation through more affordable shopping alternatives.

Why These Stocks

Each company in this group was selected for its strong value proposition and potential to absorb market share from higher-priced competitors. These retailers are tactically positioned to capitalize on changing consumer loyalty and spending habits driven by the current competitive pricing environment.

Group Performance Snapshot

8.67%

Average 12 Month Profit

On average, analysts expect assets in this group to grow 8.67% over the next year.

11 of 15

Stocks Rated Buy by Analysts

11 of 15 assets in this group are rated Buy by professional analysts.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

💰

The Consumer Loyalty Shift

Amazon's 5% price hike on essentials is creating a rare opportunity for competitors to win over price-conscious shoppers. These retailers are perfectly positioned to capture this migration of budget-focused customers.

🔍

Hidden Value Opportunity

While headlines focus on Amazon, these companies are quietly gaining ground by offering better deals on everyday items. Many investors haven't connected these dots yet, giving you a chance to get in early.

📊

Inflation-Beating Potential

As consumers battle rising prices, these retailers offer genuine savings opportunities that are becoming increasingly attractive. Their business models are specifically designed to thrive when shoppers prioritize value above all else.

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