Remember how economists predicted with smug certainty that the United States would spiral into a recession, perhaps even a deep one? There was near consensus in forecasts at the onset of 2022 and then again in 2023. Well, after being wrong twice in a row, forecasters are eager not to strike out.
Goldman Sachs predicts the U.S. economy will defy expectations in 2024, predicting gross domestic product (GDP) will surge 2.4%, compared with 1% for the consensus of economic forecasts surveyed by Bloomberg.
“The probability of a U.S. recession is much lower than commonly appreciated,” Goldman Sachs predicts, putting the odds at just 15% for the year.
“It was fair to wonder last year whether labor market overheating and an at times unsettling high inflation mindset could be reversed painlessly … but these problems now look largely solved,” David Mericle, chief U.S. economist for Goldman Sachs Global Investment Research, wrote in the team’s report titled “2024 U.S. Economic Outlook: Final Descent.”
The report also predicts real disposable income will grow roughly 3% and that inflation will slink below 2.5% by December. With that, we should expect the first cut in interest rates in years from the Federal Reserve. That would be a nice Christmas present.
As for the convenience channel, it’s time for me to make a few picks for 2024.
M&A. A top 10 growth-minded chain will be acquired, climaxing an aggressive growth cycle that yielded both great success and serious strain. Several other top 50 chains will also exit by the fourth quarter.
Battle in the Lone Star State. Casey’s General Stores will announce an aggressive growth strategy for 2025-26 in Dallas-Fort Worth, using its recent acquisition of Lone Star Food Stores as a springboard. Expect a fresh and fun battle of the brands between Casey’s and Yesway.
Pulling the plug on EVs. Well, perhaps not a total withdrawal. Outside of interstate expressways and urban areas, expect electric-vehicle sales to start losing their charge. Two automotive sources recently shared seeing an increase in hybrid sales. As for EVs? “We’re seeing maybe half the interest on EVs as we did in 2022,” one major dealer in the Northeast confided.
Biofuel wish fulfillment. The decline of EVs does not mean the forecourt ain’t changin’. After years of stalemates and Big Oil’s objections, Congress will narrowly push through year-round sales of E15, spurring a champagne toast across many Northeast and Midwest states.
Self-checkout checks out. More than one-third of retailers who started piloting self-checkout in 2022-23 will go back to 100% full-service. “We’re just not seeing the customer interest that we expected,” one Southeast retailer told me. “It’s one thing when you’re at the grocery with 20 items versus a coffee and a pack of gum at the c-store.”
Foot traffic returns. After several years of flat to modest decline, convenience will enjoy a 2%-3% industrywide lift in customer count, buoyed by gasoline prices below $3 per gallon, bigger in-store footprints and continued improvements in foodservice.
Politics. The country will see its first-ever all-women’s presidential contest, with GOP Nikki Haley squaring off against Democratic nominee Gretchen Whitmer. (Uh, we can only wish :) ).
Wishing everyone a healthy and prosperous 2024.
Mitch Morrison is vice president of retailer relations at Winsight. Reach him at mmorrison@winsightmedia.com.