Consumer Discretionary companies are those that sell ‘non-essential’ items, such as clothing retailers, media and entertainment, luxury goods, auto makers, and so on.
Consumer discretionary companies tend to sell goods with elastic demand, meaning that demand goes up as economic conditions are good and falls when conditions are slowing or recessionary.
Consumer discretionary companies are also categorically referred to as ‘cyclicals.’ Consumer discretionary stocks can also include companies in the service industry, like hotels and restaurants.