...Spending Stable, but Challenges Remain: Fitch Ratings expects U.S. retail sales (excluding auto and gasoline) to grow 3%¡4% in 2017, similar to the approximate 4.0% rate in 2016, on a generally consistent economic backdrop. However, increased online penetration and shifts in spending toward services have severely limited in-store sales growth, requiring companies to invest in omnichannel business models if their cash flow dynamics allow. Online Share Gains to Continue: Fitch expects e-commerce to grow in the mid-teens in 2017 to $400 billion, or around 12% of total retail sales (excluding auto and gasoline). Excluding food and beverage stores, drugstores and restaurants, the online channel will account for virtually all retail sales expansion in 2017 and represent nearly one-quarter of retail sales. Comparable store sales (comps) declines across many brick-and-mortar retailers are only somewhat mitigated by growth in their online businesses. Spend Shifts to Services: Fitch believes consumer...
