Americans are expected to spend their third stimulus checks on clothes, home improvement, and dining out – and it could boost stores like Kohl’s and Home Depot

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  • Outdoor dining and home improvement stores will benefit from Americans spending stimulus checks.
  • Value retailers like Walmart and Dollar General will also benefit, as in the past, Jefferies said.
  • Past stimulus checks have provided a crucial boost to the economy amid the COVID-19 pandemic.
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Retailers and restaurants are poised to see a boost in Americans buying goods if President Joe Biden signs the $1.9 trillion stimulus package, as expected.

Apparel, home improvement, outdoor dining, and travel companies are set to benefit from Americans who receive the extra $1,400 in their bank accounts, analysts at Jefferies said in a Monday note.

After the last stimulus checks in January, retail sales that month saw an 8.9% bump, indicating consumers want to spend the extra dollars, Jefferies said. This time around, the checks, which in most cases are more than twice the amount of January’s, could boost sales once again.

Read more: Buy these 14 stocks set to go into overdrive as consumers’ stimulus checks arrive in March, Cowen says

Some retailers who didn’t see much of a lift in the last stimulus round because of the “dead of winter” will likely benefit this time because of the spring season. With the nice weather, home-improvement projects and outdoor dining will be on the rise, so Home Depot, Lowe’s, Olive Garden-owner Darden Restaurants, and Outback Steakhouse-owner Bloomin’ Brands are poised to benefit. Apparel stores such as Ross and Burlington Coat Factory also will see a bump, per the report.

The January spending bill increased Americans’ year-over-year spending 20%, according to Bank of America research. Those who received the checks also spent 30% more on their credit cards than people who didn’t. Value-based retailers, like Walmart, Kohl’s, Dollar Tree, and Dollar General, saw an increase from the January checks, and they’ll “see outsized benefits” this time around, too, Jefferies said.

Companies most affected by shutdowns caused by the COVID-19 pandemic a year ago were department, clothing, and shoe stores, along with restaurants and furniture stores, Jefferies said. Those same companies are now likely to “generate the most opportunistic areas for spring 2021 stimulus benefit,” the note said.

One survey, however, wasn’t as optimistic that spending would ensue from the next round of stimulus checks. The survey, conducted by Morning Consult and commissioned by Bloomberg, found that 34% of Americans, many of whom lived in wealthier households, planned on putting the $1,400 into savings.

In April last year, many Americans received the first round of stimulus checks, worth $1,200. Most people used the money to buy the basics: groceries and medicine. Many also used the cash to buy takeout meals and even streaming and gaming services as they hunkered down at home. Big box retailers like Walmart and Target posted blowout sales for that quarter last year, saying stimulus checks were largely to thank.

At the time, the checks gave the economy a crucial boost, according to experts. Now, on the third round of government spending as the federal debt increases, President Joe Biden has said, “now is the time to go big,” adding that the government can’t spend too much to help the economy.

Read the original article on Business Insider