...Spending Stable, but Challenges Remain: Fitch Ratings expects U.S. retail sales -- excluding auto and gasoline -- to grow 3%¡4% in 2018, similar to the approximately 4.0% in 2017, 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 estimates e-commerce grew in the high-teens in 2017 to $430 billion, or 12% of total retail sales (excluding auto and gasoline). Excluding low-penetration categories, such as grocery and drugstores from total retail sales, online penetration would be closer to 25% and Fitch expects this to rise toward the low- to mid-30% range by 2020 and account for virtually all retail expansion, leaving limited opportunity for in-store sales growth. Omnichannel models, which include a consistently well-maintained retail footprint,...
