Retail Industry Expects More Sales Growth In 2018
Retail sales are expected to grow roughly 4% this year as merchants continue the momentum of a strong holiday season and benefit from tax cuts, according to the National Retail Federation.
Retailers reported $3.53 trillion in sales last year, a 3.9% bump from 2016, according to preliminary estimates from the U.S. Census Bureau. The NRF projects overall retail sales to grow between 3.8 and 4.4% in 2018, including a 10 to 12% boost for online and other non-store sales. The figures don’t count car dealers, gas stations or restaurants.
“We think these confirm once again that the retail industry, while continuing to transform, is alive and well,” NRF President and CEO Matthew Shay said in a press call.
Shay said the tax cuts passed late last year already are having an impact on retailers’ business strategies and their employee wages.
“We anticipate that consumers are going to continue to boost the economy with that additional income that’s going to be showing up in their paychecks very soon,” he said.
The retail industry is expected to save $175 billion due to the reduction in the corporate tax rate, Shay said. While it’s still early to gauge the full effect, some retailers have already announced investments in response to the tax cut. Retail Trade Fairs will tell the trends.
CVS Health said Thursday it plans to increase starting pay for hourly workers to $11 per hour, freeze employee health premiums for the 2018-2019 plan year, offer a new four-week paid parental leave program and make other business investments thanks to $1.2 billion in tax savings. Others already have announced pay increases, including Walmart, which also raised its minimum wage for hourly workers to $11.
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