Budgets/Spending/Market Size

The retail industry saw an increase of 10,000 jobs in September over August, according to the National Retail Federation.   The gains came as the Labor Department announced that the U.S. economy overall gained 156,000 jobs.  

Yet another holiday forecast brings more good cheer to retailers.   Consumers plan to spend an average of $636 on holiday-related expenses, up 3% from what they anticipated last year, according to The NPD Group’s 2016 Holiday Purchase Intentions Survey. They are also less concerned this year about the economy spoiling their holiday fun. When asked how the state of the economy will influence holiday purchases in 2016, the 12% who said it will have a “significant impact” is down from recent years (14% in 2015, 19% in 2014).

L Brands, operator of Victoria's Secret and Bath & Body Works, posted a better-than-expected 3% increase in same-store sales for September.      The retailer’s results were fueled by a 9% increase in comp sales at its Bath & Body Works brand. L Brands’ net sales rose 6% to $919.9 million in September.   The handful of other retailers who still report same-store sales did not fare so well.  

Two major retail organizations delivered some early holiday cheer to retailers.   The National Retail Federation and the International Council of Shopping Centers issued their annual holiday forecasts on Tuesday, and both predicted holiday shoppers will spend more this year than they did last year.   

Physical stores still play a crucial role in holiday shopping.    That’s one of the major themes of the International Council of Shopping Centers’ annual holiday forecast, which emphasizes that, more than ever before, shoppers will expect an omnichannel experience this season. The report predicts 3.3% year-over-year growth sales at physical stores this holiday season (compared to 2.2% increase in 2015). Including online sales for physical retailers, ICSC predicts sales will rise 3.5%.     

In the strongest forecast so far this year, holiday spending is expected to reach its highest point since the Great Recession, led by strong digital sales.   That’s according to PwC’s 2016 Holiday Outlook, which forecasts a 10% total rise in holiday spending over last year, and a 25% rise in digital sales.    “The great news for all retailers is consumers are much more optimistic this holiday season,” said Steven Barr, PwC’s U.S. retail & consumer leader. 

In its new study of retail bankruptcies, Fitch Ratings identified seven retailers as being “at risk” for filing bankruptcy in the next year to 24 months.  

E-commerce is on the rise in the grocery segement.    Online grocery sales are gaining momentum, reaching $48 billion in 12 months as of June 2016, according the “Future of E-commerce,” a report from Kantar Worldpanel. While the overall consumer packaged goods market remained flat, increasing just 1.6% over the 12-month period, online grocery sales are outpacing the market.