Since holiday shopping is about to begin, it’s important to know that consumer spending accounts for about two-thirds of GDP. This demonstrates that American consumers are a powerful force for the economy. However, large retail sectors are seeing shares crash. The occurring situation makes the holiday spending season a must needed event, even though it does not look that positive.

An article from the Business Insider called Here’s a Simple Explanation for Why the Retail Business is Brutal went into detail about the recent stock drops in high end retail stores. Macy’s stock fell 14% on November 11^th and Nordstrom’s shares were down as much as 16%. Both these company’s earnings widely missed expectations and the future outlook is disappointing.

So why are these drops occurring? Well the retail business is a tough one to maintain and retailers are having to fight harder than ever for their share of consumer dollars this holiday season.

The article also mentioned why retail is a brutal business. “Retail has high fixed costs, high working capital intensity, fickle customers, low barriers to entry,” they wrote, calling the sector a case study for the worst-possible business”. It also mentioned that fixed cost are numerous for retail companies. It has to have the physical space, inventory, personnel, and supply chain to keep the whole system running.

Over time these costs change, usually becoming more expensive. In order to maintain a company profit, it needs to keep moving profits back into the business.

It mainly depends on the consumers and what they want to buy. It could be American Eagle one year and H&M the next.

On a positive note, another article from the Business Insider called 5 Retailers that will Dominate this Holiday Shopping Season lists five retail stores that are ready to strive on sales this holiday season.

1. Victoria’s Secret- This store is buzzing for the holiday season thanks to innovative products like a new push-up bra. Also, the store is not seasonal because women need under garments all year long. This puts Victoria’s Secret ahead of other retail stores that rely on sweaters and coat sales like Macy’s and JCPenney.

2. Lululemon- The high end sportswear company is expected to grow sales as much as 12% this holiday season, according to Morgan Stanley. The new brand’s designs differ from other athleisure brands. Menswear is also beginning to gain attraction from Lululemon.

3. Ross Stores- The discount outlets Ross provides makes consumers and their wallet happy. According to Morgan Stanley, the decline in gas prices will give the middle class more spending power, which will benefit the brand.

4. Nike- With $28 Billion in annual sales, the company is the biggest player in athletic apparel market. Nike wants to focus on a few key demographics, such as women, runners, and student-athletes, which will help the company grow even larger. Morgan Stanley analysts expect the holiday season to drive growth.

5. Best Buy- New technology is growing and it is more popular than ever. Some new products will drive sales up. Best Buy has better customer service than others, which benefit the company.