Discount Retailers in Focus as Inflation Data Puts Value Shoppers Under the Spotlight

The recent inflation data and consumer spending reports have put discount retailers in focus. Three stocks exposed to these July reports are Dollarama, Zumiez, and Citi Trends.

Dollarama operates a large chain of discount variety stores across Canada and several international markets. The company generates approximately CA$7.6b in revenue from retail variety stores and has a market cap of CA$51.9b. Dollarama's mix of scale, debt, and a richer P/E multiple often gets treated like a simple trade-down story.

Zumiez is a specialty retailer focused on youth lifestyle apparel, footwear, accessories, and boardsports gear. The company generates about US$938 million in revenue from retail operations and has a market cap of US$339 million. Zumiez sits at an interesting crossroads for investors watching the July CPI and Retail Sales reports.

Citi Trends is a value-focused retailer that targets mostly African American families with discounted fashion, footwear, accessories, and home goods sold through neighborhood-based stores across the United States. The company generates about US$849 million in revenue from retail operations in the United States and has a market cap of US$589 million.