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

AmCham Cambodia cautions US against possible sanctions

Apparel/Garments | On 22nd Sep 2018

AmCham Cambodia cautions US against possible sanctions

In a letter to US lawmakers, the American Chamber of Commerce...

Courtesy: ycloset

Apparel/Garments | On 22nd Sep 2018

Alibaba invests in clothes sharing platform Ycloset

Chinese garment sharing platform YCloset has completed an undisclosed ...

KG cracker; courtesy: Ineos

Textiles | On 22nd Sep 2018

Ineos to invest £60 mn in the UK to expand production

Ineos has announced plans to invest £60 million to expand its...

Interviews View All

Divyesh Mashruwala, Akshar Industries

Divyesh Mashruwala
Akshar Industries

Surat dominates foiling, embossing and pleating

Yash Agarwal, Hitansh Online

Yash Agarwal
Hitansh Online

Every market region has its own culture and trends

Manuj Terapanthi, Texaura

Manuj Terapanthi
Texaura

Transparent supply chain and fair trade will boost sustainable market

Nitesh Mittal,

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

Shyam Gupta & Ravi Gupta,

Shyam Gupta & Ravi Gupta

Based out of South Delhi, Gargee Designer's provides bespoke formal and...

Rajat Jaipuria,

Rajat Jaipuria

Activewear brand Soul Space promotes organic cotton farming and...

Eamonn Tighe, Nature Works LLC

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Kerem Durdag, Biovation II LLC

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Silke Brand-Kirsch, Schlegel und Partner

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Judy Frater, Somaiya Kala Vidya

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Bani Batra,

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Igor Chapurin, Chapurin

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

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

Leave your Comments


September 2018

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

news category


Related Categories:

Advanced Search