NRF Forecasts 3.9 Percent Holiday Sales Growth
NRF is forecasting that retail sales will see above-average growth during the holiday season this year. But the forecast hinges on whether consumer confidence can recover from the two-week shutdown of the federal government that had millions of shoppers saying they would rein in their spending plans.
“Americans are questioning the stability of our economy, our government and their own finances,” NRF president and CEO Matthew Shay says. “We expect consumers to set a modest budget for gifts and other holiday-related purchases as they wait and see what will become of the U.S. economy in the coming months.”
Rather than giving consumers “stability and certainty,” Washington’s decision to fund government operations into January and put off the debt ceiling discussion until February “merely ensures more opportunities to continue the debate” during the holiday season, Shay says.
NRF’s holiday forecast calls for retail sales in November and December to grow 3.9 percent over last year to a total of $602.1 billion, but Shay and NRF chief economist Jack Kleinhenz caution that the numbers depend on how consumers react to Washington’s handling of the fiscal crisis.
If the forecast holds true, it would compare with 3.5 percent growth in 2012 and 3.3 percent average annual growth over the past decade. The figures include online sales, which NRF’s Shop.org division expects to grow between 13 and 15 percent to as much as $82 billion. Retailers are expected to hire between 720,000 and 780,000 seasonal workers, compared with 720,500 last year.
The forecast contrasts with NRF’s annual survey of consumers, which found that shoppers plan to spend an average $752.24 this holiday season, down 2 percent from last year. But the survey reflects only what consumers say they will do, while the forecast is based on economic modeling that takes consumer confidence and other factors into consideration.
The survey found 80 percent of consumers plan to spend less this year because of worries over the economy, with 51 percent concerned about the economy in general and 29 percent saying the government shutdown and debt ceiling debate will affect their holiday spending.