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Economic Forecasts

E-Commerce Leads Retail Sales

Kiplinger's latest forecast on retail sales and consumer spending


GDP 2.1% growth in ’17, following 1.6% in ’16 More »
Jobs Hiring pace should slow to 175K/month in '17 More »
Interest rates 10-year T-notes at 2.7% by end '17 More »
Inflation 2.1% in '17, same as in '16 More »
Business spending Rising 3%-4% in ’17, after flat ’16 More »
Energy Crude trading from $47.50 to $52.50 per barrel in August More »
Housing 6% price growth by end of '17 More »
Retail sales Growing 3.8% in '17 (excluding gas) More »
Trade deficit Widening 4% in '17, after nearly flat '16 More »

April sales were good, rising 0.4%, and March sales have been revised up to give a brighter picture to the start of the year. Retail sales in 2017, excluding gasoline, are expected to rise by 3.8%, the same growth rate as in 2016. A pickup in merchandise sales this year will balance out expected slower growth for motor vehicles and restaurant meals.

E-commerce continues to gobble up the retail gains. E-commerce sales will grow 14% this year, compared to 13.1% in 2016. In-store sales, in contrast, will rise only by the same 1.5% they did in 2016. Department stores, whose sales losses accelerated last year, are holding their own for the moment. However, announced closures are likely to cause a sales slide again later in the year. Sales at general merchandise stores, excluding department stores, have dropped for the third straight month, leading to speculation that e-commerce is starting to take a deeper bite of this sector as well.

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Electronics and appliance stores are having a strong start to the year after declines last year. Motor vehicles showed a pickup after three months of decline. Sales of building materials are also having a strong year, mirroring the strength in housing construction in general.


Food-service sales are expected to slow to a more sustainable growth pace this year. Labor shortages will make expansion difficult for some chains, and laws mandating higher minimum wages will boost menu prices.

Higher gasoline prices will make it appear that total sales are surging at a 9% rate this year. But this will be deceptive, because although gas prices are likely to rise, the volume of gas sold will stay fairly flat.

SEE ALSO: 6 Retailers That Can Stand Up to Amazon

Source: Department of Energy, Price Statistics