According to US trade body the National Retail Federation (NRF), the retail market will see 3.5 per cent growth this year compared with 6.7 per cent last year, which was the highest retail sales growth since 1999. Last year, sales soared 9.9 per cent in the first quarter, but the NRF predicts growth will reach just 3.7 per cent this quarter.
NRF chief economist Rosalind Wells said: 'Past stimuli, provided by tax cuts and very low interest rates, will no longer be there to boost consumer spending. The consumer has been remarkable in shouldering economic expansion, but something has got to give.'
Wells said the labour market will continue to expand, but is concerned this would only lead to modest income growth, putting financial strain on US consumers.
Similar to the UK, the luxury sector is expected to thrive this year, with the weaker dollar driving sales through tourism. However, discounters are expected to continue to struggle, along with the furniture and home furnishings sector.
In response to the changing market, the NRF will also broaden the retail categories it tracks. It is expected to add food and beverage stores, building materials and garden materials stores, health and personal care stores, and gift shops.