CPG forecasts stellar year for retailers
Wage and job growth are expected to translate into good news for retailers in 2019.
Retail sales in 2019 will rise 5.0%, the fastest growth pace since pre-recession 2006, according to consumer research firm Customer Growth Partners. (The National Retail Federation forecast sales predicted that retail sales in 2019 will increase between 3.8% and 4.4%.)
“Maintaining holiday’s stellar 5% growth pace—and up slightly from 2018’s 4.8% rate—retailers are poised to see a stellar 2019, buoyed by rising wages, robust job growth, and plummeting gasoline prices,” said Craig Johnson, president of Consumer Growth Partners.
Johnson noted that wages are up 3.4% from last year, 3.5 million new jobs have been created in the past two years, and average gasoline prices are a steep 65 cents/gallon below their October peak.
CGP’s 2019 Forecast projects direct-to-consumer/online sales will far outpace other sectors, with a projected growth rate of 11.1%. Other strong sectors for 2019 include consumer electronics/appliances, up 4.8%; apparel, up 4.7%; and general merchandise, up 4.1%.
“As we’ve seen for two decades now, the single biggest driver of retail spending is disposable income growth,” said Johnson. “The combination of 3%-plus wage growth and 3.5 million new jobs—including 3.8 million quality full-time jobs—creates its own polar vortex of growth drivers behind the stellar consumer spending. But unlike the debt-fueled bubble economy of the mid-2000s, today’s retail growth is based on strong fundamentals, suggesting that consumers—almost 70% of the economy—will continue healthy spending on a healthy pace at least through 2019.”
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