Worried About Inflation? These 3 Retail Stocks Have Strong Brands and Pricing Power
Consumer goods companies are wrestling with the prospects of higher supply chain costs in the near term, stemming from increasing transportation costs. This could affect what consumers pay for everyday items, such as their morning coffee at Starbucks (NASDAQ: SBUX). In June, U.S. consumer prices rose at the highest rate in 13 years. The latest consumer price index report for July showed a moderation in the rate of increase, but the 5.4% increase in price for all items on an annualized basis is still well above normal.
Whether we are witnessing a temporary or more structural increase in consumer prices, it's a good idea to think about investing in companies that have strong brands and pricing power. Not only does it help keep margins firm with costs on the rise, but it's also a sign of a great business with a durable competitive advantage -- a trait that every investor should look for when investing in stocks for the long term.
Here's why Starbucks, Levi Strauss (NYSE: LEVI), and Lululemon Athletica (NASDAQ: LULU) are great stocks to consider in this environment.
Source Fool.com
