...Slow and Steady Growth: Fitch Ratings expects U.S. retail sales (excluding auto) to grow at 3%¡4% in 2015, in line with or modestly better than the 3% growth projected for 2014. A gradual uptick in the employment rate and real wages, and some near-term benefit from lower gas prices, provide support. However, a variety of challenges, including online competition, reduced store traffic and persistent pressure on low-income consumers, will continue to constrain the overall performance of many retailers. Uneven Performance by Sector: Department stores, which serve as anchor tenants to major regional malls, and categories such as consumer electronics, toys, office supplies and, more recently, apparel are facing the most competition from online retailers and discounters. Most of the rating downgrades over the past three years have been concentrated in these categories. Outperforming sectors include home improvement chains, which are benefitting from the recovery in housing prices, and auto dealerships,...
