Monday, 26 October 2015

Germany and United States Retail Report Q1 2016 Market Report; Launched via MarketResearchReports.com

Germany and United States Retail Report Q1 2016

We continue to hold a relatively positive short-term outlook for Germany's economy. Our forecasts show that the retail market will also maintain stable growth throughout 2016. Owing to low oil prices, which we expect to persist over the coming year, we are expecting greater levels of disposable incomes for consumers to use in the retail market. Household spending is expected to climb steadily throughout our forecast period and this will bode well for non-essential and luxury goods retailers.

Germany's economy remains one of the most resilient in Europe, and among all developed nations. We are currently forecast 2.01% real GDP growth in 2016 and 1.52% in 2017, up from our projections in the previous quarter. This robust growth should ensure consumer confidence remains strong in the short-term and this will provide important growth in spending within the retail sector. One potential threat to the country's economic growth has emerged due to the VW diesel scandal, where 40 % of the company's stock value has disappeared. We believe that this may pose a bigger threat than the Greek debt crisis if sales fall substantially. Nevertheless, household expenditure is expected to grow from USD1,717bn to USD2,115bn by 2019.


The US retail sector is continuing its revival, as the economic recovery is centred around consumption. Lower oil prices, low inflation, tightening labour market and low interest rates are all fuelling household spending. Growth is coming from online sales in particular, as e-commerce continues its explosive trajectory. While interest rates are set to rise, this will be a gradual process. We therefore expect these trends to continue to play out, with opportunities across the wide retail sector spectrum.

The recovering economy is having a much larger impact for spending on non-essentials, which we believe will largely outperform essential goods across a range of sub-sectors. For example, we have a strong view on spending at restaurant to grow faster than off-trade food sales. Spending on household goods such as furniture, will also perform well in the relatively stable housing market. Sales of new cars also back up this view, with many companies reporting drastic rise in revenues in the first half of 2015. The availability of credit and lower levels of household debt are driving this trend towards non-essentials over essentials. This trend is also being facilitated by a rise in the number of middle-class and rising overall incomes. Those at the bottom end of the income spectrum are likely to remain more cautious in the near-term and essentials will still account for the vast majority of spending in the US in 2015.

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