The National Retail Federation expects the holiday season to produce bigger increases than in the past two years, although not as strong as during the rebound following the depths of the Great Recession.
In its annual holiday forecast, the Washington-based trade association said it expects retail sales during November and December — excluding those for automobiles, gas and restaurants — to rise 4.1 percent to $616.9 billion from $592.66 billion during the 2013 season. Last year’s sales change amounted to a 3.1 percent increase on top of the 2.9 percent gain recorded in 2012. The 10-year average is 2.9 percent, with the 6.2 percent gain of 2005 at the top of the range and the 4.4 percent decline of 2008 at the bottom.
Sales grew 5.3 percent in 2010 and 4.8 percent in 2011 as the nation recovered from the recession.
“Though we have only seen consumer income and spending moderately — and erratically — accelerate this year, we believe there is still room for optimism this holiday season,” said Jack Kleinhenz, chief economist for NRF. “In the grand scheme of things, consumers are in a much better place than they were this time last year, and the extra spending power could very well translate into solid holiday sales growth for retailers.
“However,” he cautioned, “shoppers will be deliberate with their purchases while also opening their wallets for hard-to-pass-up bargains.”
NRF also projected that online sales would grow between 8 and 11 percent during the season, with the top end of the forecast representing potentially $105 billion in business conducted on laptops, tablets and smartphones. The midpoint of that forecast would represent an acceleration over the 8.6 percent in non-store sales registered during last year’s holiday season.
Matthew Shay, NRF president and ceo, noted, “Recognizing the need to keep household budgets in line, we expect shoppers will be extremely price sensitive as they have been for quite some time. Retailers will respond by differentiating themselves and touting price, value and exclusivity.”
He described the first half of 2014 as “volatile” and the summer as “uneventful” for retailers.