Back-to-School Season Gives Retailers More Hope for 2016
Life + Money

Back-to-School Season Gives Retailers More Hope for 2016

But online shopping trends remain a problem for big-box chains.

REUTERS/Mike Blake

While big box stores continue to struggle with sluggish sales and disappointing earnings so far this year, the overall retail outlook is rosier.

Back-to-school sales, which comprise 17 percent of all retail sales, are poised to increase 2.6 percent this year, and overall online sales are also showing strong growth, according to a new report from eMarketer.

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While online sales as a percentage of back-to-school sales haven’t budged much over the past five years, online shopping is growing as an overall percentage of sales. The research firm projects that online sales will increase nearly 16 percent this year, to a record $397 billion, marking the fastest growth pace in five years. Online sales are projected to continue growing by 14 percent or more per year through 2020.

Full-year retail sales for 2016 are projected to grow 3.6 percent this year, with every quarter of the year showing year-over-year improvement from 2015. That’s good news for the overall U.S. economy, since consumer spending makes up more than two-thirds of GDP.

Still, the report finds that problems remain for large retailers like Target and Best Buy. “Their problems revolve less around current economic conditions and more around changing consumption patterns that are driving more apparel and electronics sales online, where margins are lower, or into other product categories, such as automobiles or sportswear.”

U.S. retail sales grew in April and May, as consumers seemed willing to spend money despite rising inflation and a slowdown in the jobs market.

Retail Back-to-School