When looking at the retail and apparel sector, we continue to see headwinds in the broader economy affecting retail sales. Headwinds include slow wage growth, mixed improvement in residential real estate, inflation in food prices, healthcare and education offset by lower power costs.
Unfortunately, we believe that government statistics may not be providing an accurate picture of the retail landscape for vendors selling into retail, though perhaps once they were our best and most reliable source. As it stands, consumer confidence may no longer provide the best overall predictor for spending at retail.
While official data may no longer give the full story, we're keeping a close eye on other major trends in the retail market, as we always have, to complement the formal statistics. Some of the key developments we've noted include:
Taken together, these price/cost pressures are pushing the retail channel to innovate to the max. Over the rest of 2016, it looks like these same forces will continue to stretch the fabric of retail… pun intended.
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With e-commerce becoming increasingly prevalent, social shaking things up and brick-and-mortar-focused retailers stepping up their online game, 2017 will prove to be an interesting year for retail.