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Key Takeaways
- Bernstein analysts believe that E-commerce retailers that have a large customer base are better equipped to weather economic downturns.
- Amazon, Walmart, and Costco are among the companies that could be "best positioned to ride a macro storm," the analysts said.
- Bernstein said that e-commerce tends to steal share from brick-and mortar retail during recessions.
Analysts at Bernstein said that E-commerce retailers who rely on a model based on membership could be more resilient against the effects of an upcoming recession.
Analysts named Amazon (AMZN), Walmart WMT, and Costco COST as the “best-positioned to ride a storm” in part due to the revenue generated by “membership lock-in.” Bernstein said that focusing on consumer staples and value could also help them gain market share if macroeconomic conditions worsen.
Analysts said that retailers who rely more heavily on discretionary spending, such as Target (TGT), Wayfair (W), and platforms like eBay (EBAY) or Etsy (ETSY), could be at greater risk.
Retail stocks have been hit hard by recession fears in recent weeks. Walmart and Target have seen their shares fall by 18% since mid February, while Amazon shares are down 10% and Costco shares are down 13%. The S&P 500 has lost 6% over the same period.
The Conference Board’s data released on Tuesday showed that consumers’ economic expectations had dropped to the lowest level in over a ten-year period.
Bernstein said e-commerce retail is also more likely to recover from a recession faster than brick and mortar stores.
