Last year, more than 4.3 million babies were born in the U.S. - the largest number in a single year - according to the National Center for Health Statistics. Although the 3 percent increase over 2006 falls short of a double-digit percentage to be considered a true baby boom by demographers, the rising birth rate is significant enough to provide a growing customer base for manufacturers and merchants. "Companies that have a vested interest in all things babies will benefit," says Ken Harris, of consulting firm Cannondale Associates. 

 "Consumers, generally, tend to not skimp on their children," Harris says, adding that this trend is true even in tough economic times. "Parents will trade down in other areas."

Analyst Paul Hickey of Bespoke Investment Group is tracking companies that he expects to profit from the influx of newborns, particularly those that focus on clothing, education, and healthcare for children.

By LINDSAY SANCHEZ, Special to CNBC.com

Clothing labeled Preemie by manufacturers can be five inches too long from wrist to wrist and six inches too large in girth according to the average body measurements of the typical premature infant. Consumers requiring clothing for the smallest infants were still rolling and tucking the garments to ensure proper fit. ANNA’S clothing lines of Sleepers, Gowns, Bag Gowns, Shirts, and Take Me Home are designed and manufactured to specific measurements ensuring a perfect fit. 

As a children's retailer

you have spent a great deal of time ensuring your store, among numerous other details, has the right ambiance, friendly staff, competitive pricing, and a selection that meets your customer’s needs. Through trial and sometimes error, you believe you have found the right mix that gives you an edge over your competitors.
Retailers have taken note that consumers are not the same as even just a few years ago. Those that fulfill the need of today's consumer notice higher market share and increased profitability - even in rough economic times.