Retail Growth to Remain Stable, Omnichannel Key In 2017

U.S. retail sales excluding automobiles and gasoline is expected to grow 3-4% in 2017, according to the Fitch Ratings Outlook, consistent with the 3.8% growth Fitch predicted for 2016. The analysts at Fitch predict that more than half of such retail growth will occur online, while in-store growth will account for just 1% of the gains.

Fitch Ratings predicts Dollar Tree, Burlington Stores, Levi Strauss, Coach and J.C. Penney are on a positive trajectory in 2017, while Sears, Claire’s Stores, Gymboree, Abercrombie & Fitch, Vince and Bon-Ton Stores will face significant challenges next year.

The report notes that retailers are facing a shift in customer shopping habits and have responded by almost universally moving to omnichannel models in an effort to best serve today’s retail customers.

“Spending focus on services and experiences appears here to stay, so the dividing line between best-in-class retailers and market share donors is increasingly going to be determined by which retailers can cater to the evolving landscape,” said David Silverman, senior director of U.S. corporates at Fitch Ratings. “Those that find success have invested in the omnichannel model and have differentiated their products and customer service to draw customers in.”

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