At the beginning of 2018 the future of the economy was a bit foggy and many had predicted problems for the retail industry. But it looks like things have changed, in a good way.
For the retail industry there is anticipation that consumers will spend confidently throughout 2018. With market growth projected to reach somewhere around 3.2 to 3.8 percent, the heated competition among store formats, channels, and players is expected to continue for the foreseeable future.
Today, consumers are taking advantage of an increasing number of choices. There are now not only traditional brick and mortar, but online and newer online application-based formats from which to choose. With all the new choices at their fingertips, consumers continue to hold elevated expectations for their shopping experience.
With the rise of online sources, retailers are having to rethink their strategies to better realize profitable growth in today’s highly competitive blended environment. Digital formats now have the potential not only to influence, but also to capture market share.
Consumers, who have benefitted from a strong labor market and rising incomes have analysts predicting that the economy is likely to continue to grow at a moderate 2.0-2.5 percent rate in 2018.
A key factor for the rosy outlook is low unemployment, and the fact that real disposable personal income is rising. Consumers are enjoying low inflation, and there is growing wealth due to rising house prices and a strong stock market. All these factors combined put money in the pockets of consumers, money that will eventually make its way to the retailers.
Still, there are those who continue to predict a meltdown for the retail industry citing store closures and recent bankruptcies as examples. While it is possible that there is a meltdown on the horizon, the data seem to contradict it. Perhaps the store closures and bankruptcies have more to do with retail evolution than the health of the economy. Only the future will tell.