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Strong Retail Sales Predicted for the Second Half of 2016

Posted on June 16th, 2016


In the first half of 2016, the U.S. GDP grew by 2 percent for the year, down from 2.4 percent in 2015.  Retail sales, however, rose 1.3 percent from the previous month, totaling a 4.2 percent growth, just shy of last year’s 4.7 percent growth largely due to sluggish pace of car sales in a saturated market.

According to Kiplinger’s forecast on retail sales and consumer spending, look out for shoppers to want apparel items, lawn care, furniture, home décor, health care products and beauty supplies in the following months.  Additionally, a beginning to warm or hot weather in many parts of the country will unleash demand for sandals, swimsuits and other summer-style clothing.

Online sales are climbing at a double-digit pace and show little indication of slowing. In April, online sales and mail-order sales account for approximately 10 percent of all goods sold, which is forecasted to further increase at the expense of brick-and-mortar shops.  For example, Amazon’s recent dedication to jump into selling fashion online will have a large impact on in-store sales for clothing departments.

Following poor numbers in the first quarter, confidence in department store earnings is at a low for the year due to lack of ingenuity. Compared with April 2015, sales for April were down 1.7 percent despite a 0.3 percent boost over March. They often struggle to put their entire inventory online, to better streamline inventory management systems, and to provide a reason for consumers to visit their physical stores.

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