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Even as several macroeconomic indicators are poised to dampen consumer spending, a few factors are expected to drive retail growth in 2006, such as websites, more male shoppers and specialty foods, according to McEvoy & Associates, a retail consulting firm.
Citing rising interest rates, high oil prices, splintered domestic U.S. politics and a down cycle in apparel, McEvoy & Associates said in a new report that 2006 will be “good, but not great” for retail. It added that people are not in “great, happy, ‘let’s-just-shop’ mode.”
But all is not lost on the retail front. Certain retailers are expected to do well based on their ability to capitalize on consumer trends, it said.
One continuing trend is the growing emphasis on online sales, it said, adding that websites will edge out store catalogs as they grab a larger percentage of sales. A recent survey from National Retail Federation and consulting firm Bearing Point seems to back up this trend, showing that the percentage of retailers with an online presence has almost doubled to 94 percent in 2005 from almost 50 percent the year before.
McEvoy & Associates noted that for many specialty retailers, their website is their largest store. It’s forecasting that retailers will continue to improve their online services, such as offering new items before they hit stores.
Other trends McEvoy & Associates pointed out were the growing male shopper, adding that retailers should cater to male shoppers more this year, as they show more interest in updating their looks and entertaining. Also, another growing trend is the rising demand for food that is healthier and organic, which companies like Whole Foods and even Wal-Mart and McDonald’s, are addressing.