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Economic Forecasts

Online Sales Surge, In-store Sales Hobble

Kiplinger's latest forecast on retail sales and consumer spending


GDP 1.6% growth for the year; a 2.1% pace in '17 More »
Jobs Hiring pace should slow to 160K/month in '17 More »
Interest rates 10-year T-notes at 3% by end '17 More »
Inflation 2.0% for '16, 2.4% in '17 More »
Business spending Slight gain in '17 after flat '16 More »
Energy Crude oil trading from $50 to $55 per barrel in March More »
Housing Single-family starts up 9% in '16, 11% in '17 More »
Retail sales Growing 3.9% in '17 (excluding gas) More »
Trade deficit Widening 4% in '17, matching increase in '16 More »

Online sales grew by 14% compared with a year ago in 2016’s holiday season — the fastest growth in five years. However, in-store holiday sales grew by only 1.4% from a year ago, little better than 2015’s anemic 1.2% rate and much weaker than the postrecession average.

Put together, total holiday sales rose by 3.4% from a year ago, better than 2015’s 2.7% rise. But sales didn’t come close to matching the 4.8% growth logged in 2014. There are some indications that consumers are now starting their holiday shopping in October. If the season is defined to include October, then 2016 sales grew by 3.6%.

See Also: All Our Economic Outlooks

Despite the surge in consumer sentiment after the election, growth in retail sales (excluding gasoline) in 2017 should look about the same as in 2016. The sentiment improvement is continuing, indicating that shoppers’ optimism will last a while. But this may translate into fewer sales than would normally be expected. Growth in motor-vehicle and restaurant sales is expected to cool after posting red-hot numbers over the past several years. And surging online sales may be countered by slower sales gains at malls because of department store closures this year. Including gasoline, total sales growth will definitely show a pickup over last year, since gas prices have already risen by about 20 cents per gallon in the past month.


The timing of any tax cuts could be a wild card. If Congress passes tax cuts early enough in the year, there could be a positive impact on spending in 2017. Otherwise, any such spending boost will be pushed back to 2018.

Retail sales overall — which include everything from autos and gasoline to restaurant meals, construction materials and garden supplies — picked up strongly in December on a 4.5% year-over-year surge in motor-vehicle sales.

SEE ALSO: 4 Retailer Stocks to Add to Your Shopping List: Amazon, Dick's, Signet, Ulta

Source: Department of Energy, Price Statistics