'08 Retail Outlook Gets Mixed Reviews From NRF
By Staff -- Gifts & Decorative Accessories, 1/15/2008 5:30:00 AM
New York – There's good news and bad news for retailing this year, according to the National Retail Federation (NRF). The bad news: the slow pace in sales growth is expected to continue. The good news: the pace will pick up in the second half of the year. Even so, retail industry sales will increase a scant 3.5 percent compared with '07.
The forecast comprises the NRP's Quarterly Retail Sales Outlook Report forecast and does not include automobile, gas station and restaurant sales.
“Consumers will be under financial stress from high energy costs, the fallout from the housing slump, and sluggish employment and income growth,” said NRF chief economist Rosalind Wells. “Shoppers will seek to pay down debt, spend more in line with income growth, and approach discretionary purchases with more restraint.”
While the outlook is somewhat reserved, Wells expects sluggish first half sales to eventually give way to stronger sales in the third and fourth quarters. NRF expects industry sales to increase 3.2 percent in the first half of the year followed by a 3.8 percent increase in the second half as economic conditions improve.
“Retailers will once again be forced to market to more practical consumers, many of whom will be looking to trade down,” said Wells. “Even areas of past high growth like luxury goods and online shopping will feel the pressure. In 2008, the challenges will be formidable for everyone.”
The NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees - about one in five American workers - and 2006 sales of $4.7 trillion.
