Top Retail Stocks Positioned for Holiday Sales Growth: Timely Picks for Investors

Picking stocks is a lot like choosing the right players for a sports team before a big game—you want the ones most likely to score when it matters. That’s why knowing which retail stocks could win during the holiday shopping season is important for investors.

Why Investors Should Care

The holiday season is when many retail companies make most of their money. If you invest in the right retailers, your portfolio could get a nice boost. But with the economy looking a bit shaky, it’s smart to weigh the risks and rewards.

Bull Case: Reasons to Be Positive

• Best Buy: Experts think Best Buy could shine this holiday because of three big trends:
  • The Windows 11 update means more people might buy new computers.
  • Smartphone sales are expected to grow in early 2025.
  • Video game sales, especially with the new Nintendo Switch 2, could be strong.
• Five Below: This discount store is making smart changes, like selling more new and popular items, and adding cool stuff based on movies and games. With people looking to save money, Five Below could get even more customers.

According to the National Retail Federation, holiday sales have grown an average of 4.9% per year over the past decade, even when the economy is uncertain. Source

Bear Case: Reasons to Be Cautious

• Slowdown in Retail Sales: This year, retail sales are only expected to grow about 3.6% compared to last year, which is slower than usual. That means there’s more pressure on stores to stand out.
• Economic Worries: With people feeling less confident and the job market getting weaker, shoppers might spend less or look for bigger discounts.
• Stock Performance: Best Buy’s stock has dropped 10% this year, showing that not everyone is convinced it will bounce back soon.

What’s New with Best Buy and Five Below?

Best Buy could get a boost from popular electronics and new video games. Nintendo, for example, expects to sell 27% more Switch 2 consoles and 7% more games next year. That’s good news for stores like Best Buy that sell these products.

Five Below is shaking things up by bringing in new items and making it easier for shoppers to find things that cost more than $5. They’ve also teamed up with big movies and games, which could attract more kids and families. Five Below’s stock has jumped 46% in 2025, showing strong investor interest.

Looking Back: What History Teaches Us

In past years, discount stores like Five Below have often done well when the economy is uncertain, as shoppers look for bargains. Electronics retailers like Best Buy tend to do best when there’s new technology or popular holiday gifts—just like the expected rush for the Nintendo Switch 2.

According to a report from Deloitte, about 73% of holiday shoppers plan to spend on electronics and toys, which are Best Buy’s sweet spots. Source

Investor Takeaway

• Keep an eye on Best Buy if you believe in strong holiday demand for electronics and video games.
• Watch Five Below for growth as shoppers trade down to lower-priced stores.
• Remember that a slower economy could make it harder for all retailers, so don’t put all your eggs in one basket.
• Look for signs that consumers are still willing to spend, like new product launches or strong sales reports.
• Diversify your investments to protect against surprises during the holiday season.

For the full original report, see CNBC