Shoppers line up outside Ulta Beauty for the 6am opening on Black Friday.
Aimee Dilger | LightRocket | Getty Images
Beauty and bargain retailers are poised to become the biggest winners in 2021, as consumers return to brick-and-mortar stores and get comfortable with socializing, according to a new survey from an investment company.
The Wells Fargo retail team recently surveyed 1,000 consumers in the United States to get a better picture of their post-pandemic shopping habits. When asked which products they are most likely to buy first after a pandemic, respondents with 40% most often chose make-up. That even surpassed the “going-out attire”, which was chosen by 37%.
One of the biggest beneficiaries of this expected beauty revival could be Ulta, analyst Ike Boruchow said.
Shares of Ulta Beauty are up about 70% in the last 12 months. The company has a market capitalization of $ 16.96 billion.
Ulta has said it expects same-store sales to grow 15% to 17% this year from 2020 levels. But it has warned that its performance will continue to be affected as long as social distance measures remain in place.
Wells Fargo expects consumption of sweat-wicking athleisure and household goods to slow down this year. Both categories have outperformed over the past 12 months, with stuck consumers stocking up on athletic apparel for their fitness routines and redecorating their bedrooms and backyards with new furniture and accessories.
In the Wells survey, only 31% said they expected to buy athleisure in the short term and 33% said the same about household items.
According to Boruchow, other winners in 2021 could include apparel retailers Urban Outfitters, Ralph Lauren and Gap, along with off-price companies Burlington Stores, Ross Stores and TJ Maxx owner TJX.
Prior to the pandemic, the off-price sector was on the run. But the focus on bargain-hunting in stores hampered performance during the health crisis, as many Americans stayed home. These companies also have less online presence.
As more shoppers return to stores to refresh their wardrobe, analysts like Boruchow expect Burlington, Ross and TJX to regain market share in apparel.
—CNBCs Michael Bloom contributed to this report.