NRF: 3.5% Growth in 2008 Retail Sales

The National Retail Federation predicts that retail industry sales will increase 3.5 percent from last year.
Retail sales should grow at a slow pace—continuing where it left off at the end of 2007—before picking up in the second half of the year, NRF said in its quarterly Retail Sales Outlook report, released Monday during NRF’s 97th Annual Convention & EXPO. The data excludes sales 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 said she 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.”