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Retail Report Card: Sales Growth Is Resilient for the Second Half

Stocks in this article: JWN WMT

NEW YORK (TheStreet) -- Despite the outlook from economists stating retail growth is faced with challenges the remainder of this year, retail sales growth will still come out strong for investors. A peek ahead looks at what may be the next key drivers of retail, economic growth, its challenges and opportunities.

American consumers are not likely to drive economic growth. Economists state that retail growth is still faced with challenges the remainder of this year however with higher income rates, consumers are expected to spend more for this year, strengthening the economic recovery.

Luxury retailer Nordstrom (JWN) has been making significant moves right to the top in the first half of 2014. The chain saw a rise in sales due to serving the higher-end consumer market, while Wal-Mart (WMT) which caters to low-and middle-income households had remained cautious resulting in the retailer experiencing weakened sales.

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Stronger sales growth is expected for retailers toward the end of year. With back to school and holiday sales still ahead, customers have adapted to new technologies and retailers are pressured to keep up with the pace.

According to Deloitte's holiday survey, 68% of smartphone owners and 63% of tablet owners plan to use their devices for holiday shopping.

"Retailers should continue to focus on and invest in understanding the customer psyche and leverage innovation to drive loyalty and customer engagement," said Alison Kenney Paul, vice chairman and U.S. Retail and Distribution leader, Deloitte LLP in Deloitte's 2014 outlook on retail.

Investors are expected to take notice on disruption of trends in the retail industry until the remainder of the year. With the customer changing at an even faster rate, retailers are working to deliver personalized experiences through omnichannel.

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