How Are Retail Sales in 2017?
by Amy Lignor
Despite consumer uncertainty, as well as a very sluggish beginning to 2017, the U.S. retail sales industry is projected to increase 4% this year.
Headlines show that many retailers and companies posted “soft” holiday sales to end 2016, which caused some notable retailers to either cut jobs or close stores as a result. However, when it comes to 2017, the National Retail Federation (NFR) released an economic forecast projecting the retail industry (this excludes automobiles, gas stations, and restaurants) to grow and reach that 4% increase aim.
When looking at the reason why, it is no surprise to see that the online sales of retail stores, and other non-store online sales are what continue to bring in the most money and will be the one “pathway” to thank for retail sales’ overall success in 2017. Online sales are dominant; some companies are seeing their online sales override in-store as much as 12%. Taking Walmart as an example, this is a company that has seen its e-commerce sales revenue soar. Those who used to love heading to the store are now exceedingly happy to stay at home and shop without the crowds, get their packages delivered on time with low shipping costs paid, while still receiving the greatest prices, best deals, and having the added fun of doing all this while sitting in their p.j.’s enjoying their morning cup of coffee.
It was NFR President and CEO Matthew Shay that said just two short months ago: “The economy is on firm ground…expected to build on the momentum we saw late last year.” He further went on to state: “With jobs and income growing and debt relatively low, the fundamentals are in place and the consumer is in the driver’s seat. But this year is unlike any other – while consumers have strength they haven’t had in the past, they will remain hesitant to spend until they have more certainty about policy changes on taxes, trade and other issues being debated in Congress.”
The new President did bring uncertainty to many industries, and businesses are waiting to see what his impact will eventually be on the apparel and textile industry. Trump discussed plans to exit NAFTA and the TPP, which could have potentially harmful effects on prices and spending. This “discussion” did have the NFR adding that all lawmakers should, “take note and stand firm against any policies, rules or regulations that would increase the cost of everyday goods for American consumers.”
But even with various questions still outstanding, the NRF report also projected the economy to gain an average of 160,000 jobs per month, which is a decrease from 2016. It will still remain consistent with labor market growth, and unemployment is expected to fall to 4.6% by the end of the year
As with every quarter, there are some consumer goods companies that have thrived – including retail – and those that have struggled to resonate with investors but are actually positioned to bounce back over 2017. When it comes to the stock market and various reports that have been released, there are consumer stocks that should actually beat the market in 2017. This positive group, when it comes to the apparel and retail industry, has Michael Kors (NYSE:KORS) as one that will shine. This designer handbag company has fallen on hard times with flat sales growth, but has still managed to beat Wall Street’s profit targets in each of the past four quarters. This name of purses and accessories don’t come cheap for the consumer, but if Trump is actually successful in lowering tax rates, it should benefit luxury goods and take this particular stock along for the ride.
Therefore, whether looking at something as elite as Kors or as valuable to the general consumer as Walmart, the future for the retail industry in 2017, thus far, looks good. And when it comes to continued increases every fiscal quarter, look for the world of e-commerce to continue to grow and exceed even the largest expectations. It is definitely all about ‘easy’ buying in this hi-tech world.
Source: GIG News