Retail Sales Expected to Rise 4.5% in 2015


shoppingThe outlook for the retail industry looks bright, with lower prices at the pump and decreasing unemployment boding well for consumer spending. Retail sales are expected to rise 4.5% in 2015, which is about one percentage point stronger than 2014 growth, according to a report by Kantar Retail, whose analysis excludes automobile dealers, and gas and food service.

Growth will improve in most channels in 2015, the study notes, but remain skewed toward online gains. Online sales, which account for approximately 10% of total retail sales, are expected to grow 15% this year, same as in 2014, while sales at physical stores are expected to rise 3.6%.

The retail landscape will remain uneven and fragmented with most of the gains driven by younger people. By channel, Kantar sees another year of healthy growth for drug stores as healthcare reform rollout sustains spending from the newly insured.

While online competition will weigh on all specialty stores, the apparel channel will be bolstered by job and income gains. Department stores will lag. The home goods market hinges partly on subsiding price deflation that dampened 2014 growth, according to Kantar.

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