The economy will keep chugging along, according to the group
The National Retail Federation (NRF) announced that it expects holiday sales to rise 3.6 percent—beating the average 3.4 percent sales have risen since the 2009 recovery.
It also beats the 10-year average of 2.5 percent, as well as last year’s estimated 3 percent gain.
“It has been a tough year for retail,” says Jack Kleinhenz, NRF chief economist. “But the consumer continues to be driving this economy. I believe as we get into the holiday season the consumer will have to switch gears and think about what presents they should be giving.
“I don’t think it will be a stellar breakout year,” he adds, “but it’s reflective of how the economy is chugging along and the consumer is driving the growth.”
He notes that employment numbers have generally been positive, consumer confidence remains high, and that retail spending has risen for most of the year. Even the negative numbers, he says, have been driven by external factors.
“People are forgetting that we have price deflation that’s occurring so people are buying more and having to spend less,” he says. “We don’t have weak demand as much as weak pricing.”
One possibly unsettling factor is the presidential election, he says.
“It’s a wild card,” he says. “There is a lot of rhetoric about the economy. I think people are realistic. The political sentiment is different than the economic sentiment. Consumers have a budget. They will figure out how to use it.”
As usual, non-store consumer spending—which generally means e-commerce—will outpace the rest of retail spending, with NRF predicting it will increase 7 to 10 percent, slightly higher than last year.