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Economic Forecasts

In-Store Sales Beat Expectations

Kiplinger's latest forecast on retail sales and consumer spending


GDP 2.6% pace in '18, up from 2.2% in '17 More »
Jobs Hiring pace should slow to 175K/month by end '17 More »
Interest rates 10-year T-notes at 2.4% by end '17 More »
Inflation 2.1% in '18, up from 1.9% in '17 More »
Business spending Rising 3%-4% in '17, after flat '16 More »
Energy Crude trading from $50 to $55 per barrel in February More »
Housing Existing-home sales up 1.3% in '17 More »
Retail sales Growing 3.8% in '17 (excluding gas) More »
Trade deficit Widening 6% in '17, after nearly flat '16 More »

Excluding e-commerce, retail sales posted healthy growth in the second half of 2017, rising from 1.5% in the first half to 2.5%. That pales compared to the expected 14% gain in e-commerce, but it is an encouraging sign nonetheless for beleaguered brick-and-mortar retailers.

Sales growth will wane after hurricane damage caused sales of autos and building materials to spike. October sales rose modestly, 0.2%, after posting a strong 1.9% gain in September. Restaurateurs saw a boost, too, and gasoline prices rose because of hurricane damage to refineries.

Excluding gasoline, 2017’s sales are likely up 4.0%, a bit above 2016’s 3.8% pace. Building materials should rise 7.8%, up from last year’s 5.7%. Restaurant sales will rise 3.2%, down from last year’s 5.6%. Increases for most other categories will look like last year’s.

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E-commerce sales will grow 15% in 2017, the same as in 2016. E-commerce has shown remarkably solid growth over the past seven years and will account for 9% of retail sales (13% of all goods sales) by the end of this year. In-store sales excluding building materials will rise 2.0%, a slight pickup from last year’s 1.4% gain.


Restaurant sales are now growing at a more sustainable 3.2% pace, down from 5.6% in 2016. Some chains will find expanding harder because of labor shortages, which will curtail a stronger sales increase. Higher minimum wages will boost menu prices. Sales grew strongly for six years straight and are due for a breather.

2018 sales, excluding gasoline, will grow 4.0%, about the same as in 2017. Auto sales will plateau after years of strong growth. Sales of building materials will settle down to a more traditional pace of 5%. The increase in in-store sales excluding building materials should edge up to 2.1%. E-commerce sales will grow another 15%. Restaurant sales will rise moderately.

SEE ALSO: 6 Retailers That Can Stand Up to Amazon

Source: Department of Energy, Price Statistics