The National Retail Federation is projecting that retail industry sales (excluding automobiles, gas stations, and restaurants) will decrease 0.5 percent from last year. According to its quarterly Retail Sales Outlook report, NRF sees more challenges ahead as consumers continue to shift their spending priorities.

“Most of the consumer behavior we saw in 2008 will continue well into this year,” said NRF chief economist Rosalind Wells. “Shoppers will be seeking value and trading down to discount and off-price retailers in order to stretch their purchasing power.”

The first half of the year will see a continuation of the weakness that was felt in most of 2008, NRF said. First half sales are expected to decline 2.5 percent. There will be some improvement in the third quarter with sales decreasing 1.1 percent. In the fourth quarter, sales are expected to improve 3.6 percent due to easy comparisons to last year as well as a strengthening economy.

JCK