Decreasing pandemic savings, coupled with sticky inflation, should have impacted American shoppers' desire to open up their wallets. However, consumers remained resilient and went on a shopping spree at retail outlets in February. Strength in the labor market and the Federal Reserve’s dovish stance led to retail spending last month.

This calls for keeping a tab on retailers such as Brinker International EAT, Fortune Brands Innovations, Inc. FBIN, CAVA Group, Inc. CAVA, Carrols Restaurant Group TAST and Texas Roadhouse TXRH, which are poised to gain even more.

Retail Sales Bounce Back in February

Per the Commerce Department, sales at retail outlets in the United States increased 0.6% in February from January’s revised decline of 1.1%. Spending at U.S. retailers took a beating in January due to the severe winter weather that kept American shoppers confined at home. However, outlays at retail stores rose in seven of the past 10-month period through February.

U.S. retail sales were broad-based in February, with sales at gas stations increasing 0.9% month over month. Sales also rose a solid 2.2% at home improvement stores, while car sales jumped 1.8%. American shoppers purchased electronics and appliances with its sales increasing 1.5%. At the same time, sales at bars, restaurants and various eatery outlets increased by 0.4%.

So, what drove retail sales upward? Spending at retail outlets increased primarily because of the strength in the labor market. Employers added 275,000 jobs in February, beating expectations of an increase in nonfarm jobs of 200,000, added the Bureau of Labor Statistics.

The unemployment rate, by the way, increased to 3.9% last month, but it's less than the long-term average of 5.7%, a tell-tale sign that jobs are added to the economy at a steady pace. Most importantly, wages improved, with the average hourly earnings increasing 4.3% year over year (read more: February Jobs Report Shows a Mid-Year Rate Cut: 5 Winners).

But it’s not just in February; sales at retail outlets are expected to improve throughout this year as well. This is because the Fed intends to trim interest rates during the latter part of the year, which will give consumers the wherewithal to spend more. Additionally, retailers have introduced enticing online and offline deals, which should lure consumers to spend on nonobligatory items.

5 Big Winners

It’s judicious for astute investors to keep an eye on retailers that directly profit from this promising economic backdrop and an improvement in retail sales.