Retail in the US: To thrive you must first survive

​Nominal retail sales in the US bounced to +3% y/y end of 2016. Sales should accelerate in 2017-18 thanks to boosted household consumption and recovering retailers’ pricing power. Yet a rise in import costs could offset the fiscal stimulus’s benefits.

Publicly listed retailers deleveraged in 2016. Net gearing was down to 95% (-15pp vs. 2015), while EBIT recovered at around 8%. 

The groceries segment has been so far spared by most of the disruptive impact, unlike Apparel and Electronics the main victims of restructuring and failures.