Retail sales growth expected to top 2013
February 10, 2014
Washington--With the economy anticipated to grow at its fastest rate in three years and unemployment dropping, the National Retail Federation predicts retail will be in a “relatively good place” in 2014.
In its forecast released Thursday, the NRF said it expects retail industry sales, excluding automobiles, gas stations and restaurants, to grow 4.1 percent this year, up from the preliminary 3.7 percent growth seen in 2013.
Online sales are forecast to increase between 9 and 12 percent.
“Measured improvements in economic growth combined with positive expectations for continued consumer spending will put the retail industry in a relatively good place in 2014,” NRF President and CEO Matthew Shay said.
The term “cautiously optimistic” pops up in the statement released by the NRF. This has been the phrase echoed by the entire retail industry since the recession, and it doesn’t seem that will change any time soon.
In National Jeweler’s year-end sales survey, the full results of which will be published this month, the greatest percentage of survey-takers, 42 percent, said they were “somewhat optimistic” about 2014. The next greatest percentage of respondents, 26 percent, said they were uncertain while 24 percent were very optimistic.
Only 9 percent reported being somewhat (7 percent) or very (2 percent) pessimistic about the year ahead. (Total may not add up to 100 percent due to rounding.)
Positive factors contributing to the NRF’s retail forecast include early estimates for economic growth as measured by real GDP of 2.6 to 3 percent, its fastest pace in three years, and a growing labor market that could decrease unemployment to 6.5 percent or lower by the end of the year.
The jobs reported issued Friday, however, showed that employers added jobs at a slower rate than expected in January, indicating weakness in the labor market. Despite the discouraging jobs news, the unemployment rate did drop a tenth of a percentage, to 6.6 percent.
In addition, the NRF points out that the housing sector is expected to continue to improve, and increased household and business confidence should spur more spending overall, though NRF Senior Economist Jack Kleinhenz notes that the economy remain susceptible to “buffets,” external forces that could knock it off course.
These include harsh winter weather, which nearly all of the country has experienced, and domestic and global financial issues.
“While we are careful not to ignore the challenges, we are optimistic and hopeful that future disruptions will be limited, allowing employment and business investment to grow all the while giving retailers and their customers the confidence in the economy they need,” Kleinhenz said.