Fitch predicts modest sales growth in 2015

NEW YORK - Overall U.S. retail sales (excluding auto) are expected to grow 3%-4% in 2015 although a variety of challenges will continue to constrain the performance of several retailers and retail segments, according to a new Fitch Ratings report.



A gradual increase in the U.S. employment rate and real wages along with near-term benefits from lower gas prices will support retail sales growth.



Industry challenges include online competition, reduced store traffic, particularly for department stores, and persistent economic pressure on lower-income consumers.



Fitch notes that while online accounts for just 13% of retail sales, it now accounts for almost 50% of retail sales growth. It projects that online sales will grow in the low teens over the next several years and surpass $300 billion in 2016, while sales excluding online will grow at a modest 1.5%-2% over the same period. An intense promotional environment is therefore a permanent reality as retailers fight for a share of this modest growth.



The full '2015 Outlook: U.S. Retailing' is available at www.fitchratings.com.