Past holiday season sales define winners and losers in retail

NEW YORK -- The 2018 holiday season turned out to be a mixed bag for retailers, with some of them defying a gloomy government report in December raising concerns shoppers were hunkering down everywhere.

Retailers such as Walmart, Target and Best Buy, responding faster to a more competitive landscape with expanded delivery services and spruced up stores, are enjoying strong sales. Off-price chains such as T.J. Maxx parent offering treasure hunt experiences have remained a sweet spot.

But mall-based clothing chains and department stores -- particularly those targeting middle-income shoppers -- continue to muddle along. Macy's had weak holiday sales, ending a year-long recovery after a three-year slump. J.C. Penney and Gap are both closing more stores after lackluster holiday sales.

This year is expected to be challenging as economic growth is expected to slow. The once-strong housing market is cooling. And smaller tax refunds could put a damper on the current quarter results, hurting sales of big ticket items such as TVs.

If shoppers pull back, analysts say the healthy retailers will face some pressure to get them to spend. But for the already struggling chains in a slump despite a strong economy, their prospects will become even worse.

"If you are sitting in the mall and you are watching all the stores closing around you, it has to be disheartening," said Ken Perkins, president of Retail Metrics, a retail research firm. "But there are a handful of big box stores that will be able to weather any downturn. They have the capital to pick up market share as others struggle."