Looking forward, retailers expect sales growth in the 4 to 7 percent range. Retailers report that, other than computer help, tight labor markets are not constraining their operations. Most hiring is related to store expansions. Wage growth for most workers has picked up a notch, to a 4 to 6 percent pace. Wages for computer-related occupations are said to be increasing at an 8 to 10 percent rate.
Most respondents report that both sales prices and gross margins are holding steady.
However, the cost of some merchandise has declined as a result of import price reductions. Other non-labor costs are stable. Retailers report that capital spending increases are primarily technology-related. In contrast with 1997, they are not planning major store expansions, except in the very fast-growing office supply sector. Of the remainder, about the same number report faster growth as report declines.