The National Retail Federation on Monday forecast retail industry sales (excluding automobiles, gas stations, and restaurants) will increase 3.4 percent in 2013.
That’s down slightly from the preliminary 4.2 percent growth seen in 2012. The subdued forecast comes on the heels of a holiday season that was affected by political wrangling over fiscal concerns, “shifting consumers’ spending plans downward,” the federation said. Holiday sales in 2012 grew 3 percent.
Shop.org, NRF’s digital division, said it expects online sales in 2013 to grow between 9 and 12 percent. Online sales in 2012 during the months of November and December last year grew 11.1 percent.
“What we witnessed during the holiday season is an indication of what we are likely to see in 2013,” said NRF President and Chief Executive Officer Matthew Shay. “Consumers read troubling economic headlines every day and look at their bottom lines at the end of the month, and they don’t like what they see.
“Pushing fiscal policy decisions down the road will lead to even greater uncertainty, and will continue to impact consumers’ desire and ability to spend on discretionary items. The administration and congress need to pursue and enact policies that lead to growth and economic expansion, or it could be another challenging year for retailers and consumers alike,” he said.
Shay added retailers will compensate for the drag on household spending this year by managing inventories and focusing on unique promotions in stores and online and exclusive product lines.
Factors affecting NRF’s forecast include employment levels, income growth, housing, inflation, and consumer confidence.
“The labor market continues its modest recovery but 2013 is not expected to result in meaningful acceleration in growth,” NRF said.
As for income growth, “consumers are constrained by modest growth in income, and recent legislation passed in January increased payroll taxes for millions of workers, further limiting and Americans spending decisions.”
NRF expects the housing sector to continue to improve and the fundamentals for growth to see continued gains in 2013, while inflation should not be a worry as “price pressures continue to be contained.” - Eric Johnson