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Despite challenges, modest retail growth expected

Big Data Download

Retail sales are expected to be modest over the holidays and into 2014, but brick-and-mortar stores will continue see more competition from online retailers.

Holiday sales should grow by 3 to 4 percent, according to Fitch Ratings.

"The payroll tax increase and the general economic uncertainty will continue to place pressure on general merchandise and apparel sales throughout the holiday season. As a result, the promotional environment will remain intense and gross margins are expected to decrease modestly for most retailers," Fitch Analyst Monica Aggarwal told "Big Data Download."

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Fitch expects total U.S. retail sales to grow about 4 percent in 2014, with same-store sales growth of about 2 to 3 percent.

The biggest challenge for many traditional retailers in the coming year is maintaining market share as online sales grow, according to the firm. Fitch estimates that online sales will account for more than 10 percent of overall retail sales.

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Discount retailers and dollar stores should continue to do well, while office supply and electronics stores could be hurt by increased competition, according to Fitch.

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