The National Retail Federation Monday predicted slower growth in 2013 as consumers metabolize tax increases in the early part of the year and open up their wallets as the year goes on.
The Washington-based trade association forecast retail sales growth of 3.4 percent for the year, slightly above the 3.3 percent growth registered in 2010 and below the increase of 5.8 percent in 2011 and the 4.2 percent increase expected to be tallied for last year once final figures are in.
A 3.4 percent increase would put retail sales this year at $3.11 trillion, up from $3.01 trillion last year. It would also fall below the 10-year average of a 3.6 percent increase.
Matthew Shay, president and chief executive officer of NRF, said online sales growth — defined as the volume of all nonstore transactions — would be up between 9 and 12 percent. The figures exclude sales of automobiles and at gas stations and restaurants. That follows an 11.1 percent growth rate during the holiday season last year for what has been the hottest segment of domestic retail sales. Overall holiday sales were up 3 percent.
Shay said that the start of 2013 will resemble the end of 2012, with consumers holding back because of uncertainty as Congress and the Obama administration continue to squabble over ways to reduce costs and enhance revenues.
“Many people will be shopping for price more often, and there may be some trading down and reshuffling because of changes that many people are seeing in their paychecks,” he noted.
Those changes included tax increases that greeted wage earners at the start of the new year and are likely to depress spending, particularly in the first quarter. Growth is likely to expand after a difficult first quarter, as the hit on paychecks is digested. Having gauged the mood of ceo’s at NRF’s Big Show in New York, which wrapped up on Jan. 16, he said executives were reasonably optimistic but, in a reference to the gridlock permeating Washington in recent years, they believe growth could improve materially “if we could just get out of our own way.”
“The recession’s been over a long time,” Shay said. “The problems in the last two years are largely homemade.”
He repeated his call for pro-growth policies from the government, including reforms of the U.S. tax code, a resolution of immigration policy and exploitation of domestic energy sources to spur job, income and spending growth.
Jack Kleinhenz, NRF’s chief economist, said he expected “a continuation of a subpar growth economy” this year, with expansion in gross domestic product of approximately 2 percent, “about the way that 2012 ended.” He said he expected unemployment to descend to the “low sevens” from its current rate of 7.8 percent.
He added that apparel sales would benefit from “reasonable and steady” cotton pricing. “Demand will be a function of people’s needs,” he said in response to a question from WWD, “but don’t underestimate the importance of fashion.” He also pointed out that some of the appreciation in retail sales of apparel in the past two years was a function of higher prices rather than greater demand or stronger unit sales.
Shay and Kleinhenz both referred to the strength of retail sales during the early part of last year, a phenomenon that is expected to make it more difficult to generate strong increases in the first months of 2012. As sales decelerated later last year, comparisons will become easier as the year progresses.
Also on Monday, Customer Growth Partners projected “anemic” retail sales growth of 2.9 percent for the year, “a second year of deceleration from the peak postrecession year of 2011,” according to Craig Johnson, president of the New Canaan, Conn.-based research and consulting group. He said slow income growth, coupled with tax increases, would deter sales expansion, while growth in the housing market and pent-up demand for home projects would offset these factors.
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion
“I’m Russian and I love to use all these little tricks that I got from my grandma or my mom. We didn’t have a lot of money for creams or anything like that so we would use a garden as a beauty treatment regime. We’d put cucumber in the fridge and do a cucumber mask,” says model @irinashayk on one of her beauty hacks. WWD asked celebs what their go-to self-care rituals are. See what Naomie Harris, Freida Pinto and more said on WWD.com. #wwdeye #wwdbeauty (📷: @zefashioninsider)
Exclusive: @viktorandrolf are teaming up with @Zalando on a collection made from leftover clothing. The lineup, which lands at the retailer February 1, includes 17 pieces adorned with sliced up and repurposed overstock from the retailer’s private label collection. Pictured here is a look from the collection –– see more on WWD.com. #wwdfashion #wwdnews
@duewestnyc is the newest bar joining the collection of intimate neighborhood-focused spaces in the West Village. The cocktail menu, which includes bitters and syrups made in-house, offers a “Build Your Own Old-Fashioned” – like the one pictured here – where guests can choose from a list of spirits and unexpected sugars and bitters. #wwdeye
Spotted at last night’s National Board of Review gala in NYC: Angelina Jolie. Jolie – along with Meryl Streep, @lupitanyongo and more – continued the all-black dress code from Sunday’s Golden Globes. #wwdeye (📷: @lexieblacklock)