By Trevor Hunnicutt
NEW YORK (Reuters) – Investors would normally be thankful for a strong U.S. economy, yet this holiday season they worry retailers may have to spend heavily to win, leaving shareholders with a lump of coal.
Steep discounts are as familiar a sight during the holidays as rich desserts, but this year so is a fierce grab for a slice of the e-commerce market as Amazon.com Inc (O:AMZN) and Target Corp (N:TGT) offer free shipping for small purchases.
Underwhelming earnings reports this week from Target to department store Kohl’s Corp (N:KSS) and home-improvement specialist Lowe’s Cos Inc (N:LOW) reminded investors that U.S. tariffs on imported goods, fickle consumer tastes and competition could eat away at profits this year. Shares of Target fell 10 percent on Tuesday as the company said profit margins declined due to growing investments in boosting its online business, wage increases, price cuts and the higher cost of preparing and shipping orders.