FTI Consulting Projects U.S. Holiday Retail Sales to Grow 3.3 Percent
November 15 2016 - 7:30AM
FTI Consulting, Inc. (NYSE:FCN) today released its 2016 U.S.
Holiday Retail Report: It’s Groundhog Day for U.S. Retailers, which
finds that sales growth remains low despite the best efforts of
merchants to win over shoppers.
FTI Consulting’s Retail & Consumer Products practice
projects a 3.3 percent increase in retail sales this holiday
season, roughly in line with 2015’s 3.4 percent gain. A slight
moderation of income growth and household wealth gains heading into
the season is the primary reason for modest expectations, according
to the report, which considers General Merchandise, Apparel and
Accessories, Furniture and Other Sales (“GAFO”) retail sales and
non-store sales from November 2016 through January 2017.
“The season is shaping up to be another lackluster one for
retailers,” said Christa Hart, a Senior Managing Director in the
Retail & Consumer Products practice at FTI Consulting.
“Bargains will abound, but American consumers continue to exercise
restraint compared to more free-spending ways of the past.”
Shoppers have come to expect traditional retailers to be price
competitive with online retailers such as Amazon.com. As a result,
many large retailers continue to engage in highly promotional
activities that ultimately harm their underlying financial
performance, as operating margins and return on investment have
trended lower for the past three years across nearly all retail
segments.
In the aggregate, in-store sales growth has gradually trended
lower each year since 2012 and recently turned negative. In
contrast, non-store sales, including both online and catalog
purchases, have consistently grown by a low double-digit rate and
have accelerated since 2015.
According to FTI Consulting’s recently released U.S. Online
Retail Forecast: Omni-Channel Retailing Challenged by Its Success,
online retail sales growth has accelerated slightly in the past
year to just over 14 percent. The forecast projects U.S. online
retail sales will approach $440 billion in 2017 and $562 billion by
2020, with online market share reaching 21 percent by the end of
the decade.
“The 2016 holiday season is just one waypoint on the larger
journey for retailers,” Ms. Hart said. “Larger retailers must
contend with the daunting challenge of defending market share and
profitability in an environment where sales continue to move away
from stores and profits are being squeezed. This is not a path that
many retailers can continue on indefinitely.”
About FTI ConsultingFTI Consulting, Inc. is a
global business advisory firm dedicated to helping organizations
manage change, mitigate risk and resolve disputes: financial,
legal, operational, political & regulatory, reputational and
transactional. With more than 4,600 employees located in 29
countries, FTI Consulting professionals work closely with clients
to anticipate, illuminate and overcome complex business challenges
and make the most of opportunities. The Company generated $1.78
billion in revenues during fiscal year 2015. For more information,
visit www.fticonsulting.com and connect with us on Twitter
(@FTIConsulting), Facebook and LinkedIn.
FTI Consulting, Inc.
1101 K Street NW
Washington, DC 20005
+1.202.312.9100
Investor Contact:
Mollie Hawkes
+1.617.747.1791
mollie.hawkes@fticonsulting.com
Media Contact:
Matthew Bashalany
+1.617.897.1545
matthew.bashalany@fticonsulting.com
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