• RESEARCH

Daniel: Cheap is In, Luxury is Out 

Posted on Jan 22 | 21:01

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Business at 99 Cents Only (NYSE:NDN), Family Dollar (NYSE:FDO) and Dollar Tree (Nasdaq:DLTR) is flourishing. Over the past year, they have been some of the top performing retail stocks.

Their secret: selling cheap stuff.

As world economies enter recession, consumerism is taking a beating. Sorting through their basements, Americans just can't help but realize that they have been spending too much on things they don't really need and couldn't really afford.

So here's a survival recipe for Chinese manufacturers: shift product mix away from expensive luxury stuff and towards inexpensive, necessary goods.