Home / Knowledge / News / Textiles / Moody's: US retail outlook remains positive
Moody's: US retail outlook remains positive
31
Oct '15
The US retail industry will see steady growth through 2016 amid improved operating efficiencies, despite still-cautious consumer spending, says Moody's Investors Service. The rating agency's outlook on the industry remains positive.

Moody's expects the industry's operating income to grow 5-6 per cent this year and in 2016.

"Operating income growth will be driven mainly by continued strong performance at key companies in the home improvement, auto parts retailers and supermarket sectors, as well as specialty retail, off price retailers and department store sectors," said Mickey Chadha, a Moody's Vice President - Senior Analyst.

Moody's lowered its US retail sales forecast to 3 per cent – 4 per cent growth in 2015 from 4 per cent-5 per cent, owing to much lower fuel prices in the first half, as well as severe weather that forced consumers to stay at home. However, retail sales growth will likely pick up again to 4 per cent-5 per cent in 2016 as gasoline prices stabilize, according to the report, "U.S. Retail Industry: Steady Growth Through 2016 As Companies Juggle Efficiencies with Mixed Fundamentals."

Yet economic conditions remain mixed. While the industry is benefiting from clear positives, such as solid gains in household wealth, spending by the lower-income demographic is still constrained. As long as disposable income remains weak, underemployment persists and wage growth stays sluggish, consumer spending is unlikely to rise meaningfully.

Furthermore, the discounters and warehouse clubs, the biggest subsector in US retail with a 30 per cent operating earnings contribution to Moody's rated retail universe, will see a 4 per cent-5 per cent drop in operating income in 2015, muting the momentum of the broader retail industry. Walmart, which makes up 75 per cent of this subsector's operating profits, will be the main source of pressure as it continues to show weak performance amid wage hikes and investments for future growth.

"Also, e-commerce sales will continue to gain momentum, aiding various sectors as more companies seek to meet customer demand for greater flexibility and choice," added Chadha. "Although still only a small part of the overall retail landscape, e-commerce is driving major change and will remain the industry's fastest-growing segment." (SH)

Fibre2Fashion News Desk - India

Must ReadView All

Courtesy: Li & Fung

Textiles | On 24th Mar 2017

Li & Fung forms new supply chain partnership with PVH Corp

Li & Fung Limited, the world's leader in consumer goods design,...

Courtesy: Alizilla

Apparel/Garments | On 24th Mar 2017

Alibaba's eWTP finds first overseas base in Malaysia

In a step towards using the internet to bring small businesses around ...

Textiles | On 24th Mar 2017

BJMC to produce cotton-jute blended denim fabrics

To meet demand from the market, Bangladesh Jute Mills Corporation...

Interviews View All

Nitin Bhatia
Trend Arrest

Setting up a brand for online selling is easy, but running the brand is not

Abhishek Samdaria
Reflete

GST will certainly reduce a lot of paperwork in future

Smarth Bansal
Colorjet India Limited

We would like to venture more companies into the Indian market

Iago Castro Asensio
RCfil Distribuciones S.L.

Iago Castro Asensio, International Business Manager of RCfil...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Pranav Mishra
Huemn

Designers Pranav Mishra and Shyma Shetty’s Huemn is known for its...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
March 2017

March 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search