U.S. retail gross sales to rise 6.5% to eight.2% in 2021, Nationwide Retail Federation says
Customers wearing protective masks leave a Uniqlo store in San Francisco, California on Wednesday, February 17, 2021.
David Paul Morris | Bloomberg | Getty Images
Retail sales are expected to grow between 6.5% and 8.2% this year, representing sales of more than $ 4.33 trillion, as the US economy re-opens and people keep growing received the Covid vaccine, the National Retail Federation announced on Wednesday.
A preliminary reading shows retail sales rose 6.7% to $ 4.06 trillion over the past year, the industry’s leading trading group said, despite the health and economic challenges caused by the pandemic. This was largely fueled by an online growth of nearly 22%.
Over the year, more Americans have turned to websites and apps to shop for groceries, comfortable clothes, and housewares. The numbers exclude car dealerships, gas stations and restaurants.
This year, NRF is forecasting e-commerce sales growth between 18% and 23% to $ 1.14-1.19 trillion. That growth is included in NRF’s total retail sales forecast.
“The development of the economy depends on the effectiveness of the vaccine and its spread,” said NRF chief economist Jack Kleinhenz in a statement.
“Our main assumption is that vaccination will be effective and allow accelerated growth by mid-year,” he said. “The economy is expected to grow the fastest in over two decades.”
Kleinhenz added that further consumer savings, record high stock valuations, escalating house prices and record low interest rates are already on the horizon this year, all of which add to NRF’s outlook for a robust economic recovery.
The trade group also believes that as Americans become more comfortable traveling and attending social gatherings, more money will be spent on services, which typically account for 70% of consumer spending.
“We are very optimistic that healthy consumer fundamentals, pent-up demand and widespread vaccine penetration will result in increased economic growth, retail sales and consumer spending,” said Matthew Shay, President and CEO of NRF.
Some retailers have started giving some insight into their expectations for the year. Macy’s, for example, has announced that this year will be a year of recovery and rebuilding after suffering sharp sales declines in 2020. However, a recovery in international tourism is not yet taken into account.
Home Depot, which has benefited from robust growth as more Americans invest in their homes during the pandemic, didn’t offer a full year outlook when it reported profits earlier in the week. CFO Richard McPhail said the retailer is unsure how long the pandemic will last and how it could affect consumer spending.
Read the full press release from NRF here.