After nearly a decade of tough times for retailers, the future looks rosy.
On Monday, the National Retail Federation released its 2018 economic forecast, projecting that retail industry sales will grow between 3.8 and 4.4 percent over 2017. Online, catalogue, vending machine and kiosk sales, which are included in the overall number, are expected to increase between 10 and 12 percent. (These figures exclude car dealerships, gas stations and restaurants.)
NRF’s optimism is tied to strong employment, improved salaries and higher-than-expected holiday sales. According to the U.S. Census bureau’s preliminary statistics, holiday sales during November and December increased 5.5 percent over the same period in 2016. This put the year’s total sales at $3.53 trillion, a 3.9 percent growth at 3.9 percent — exceeding NRF’s 2017 forecast for growth between 3.2 and 3.8 percent.
“A robust holiday season for retail sales is just one of many barometers that points to a consumer that is clearly feeling positive about their financial health,” said NRF President and CEO Matthew Shay.
“Despite headlines to the contrary, the retail industry is strong, growing and meeting consumer demand with the products they want at the prices they expect and the shopping experience they want to have, online or in store,” Shay added. “With consumer confidence high, unemployment low and wages growing, there is every reason to believe that retail sales will be robust throughout the year.”
The overall economy is expected to gain an average of 163,000 jobs a month, unemployment is expected to drop to 3.9 percent by the end of the year and gross domestic product growth is likely to be in the range of 2.5 to 3 percent.
“The underpinnings of the economy are very good and consumer spending is at the center of our outlook,” said NRF Chief Economist Jack Kleinhenz. “And as the retail industry continues to transform, retailers will leverage the new tax plan to invest in their employees, stores and new formats that engage with the ever-evolving and demanding consumer.”
Forty-eight percent of respondents to the Society of American Florists’ recent Economic Outlook Survey said they are “optimistic” about sales expectations in 2018 — another 16 percent said they are “very optimistic.”
To listen to the NRF’s forecasting conference call, click here