RETAIL SALES EXPECTED TO CLIMB AS MUCH AS 4.4 PERCENT IN 2018
- Hello at Cece Feinberg Consulting
- Feb 15, 2018
- 2 min read
U.S. retail sales in 2018 could climb slightly higher than last year, as lower unemployment and growing wages drive consumer confidence higher.
The National Retail Federation projected industry sales will grow between 3.8 and 4.4 percent this year, excluding automobiles, gas stations, and restaurants. That compares with NRF's forecast last year of growth between 3.2 and 3.8 percent. A jump of 4.4 percent would be the biggest increase since 2011, when retail sales climbed 5 percent.
Online and other non-store sales, which are included in NRF's total projections, are expected to increase between 10 and 12 percent. That incorporates sales made from mall kiosks, catalogs, and vending machines.
"A robust holiday season for retail sales is just one of many barometers that points to a consumer that is clearly feeling positive about their financial health," NRF President and CEO Matthew Shay said.
NRF's annual forecast follows an encouraging holiday season for many retailers. Department stores and a slew of specialty brands ended 2017 on a high note when compared with the year prior.
Companies are also still announcing plans for how they will use anticipated savings from new tax legislation. Bonuses, wage hikes, and sweetened benefits are being offered to some part- and full-time retail employees already, but the start of 2018 has also brought news of store closures and job cuts across the U.S.
"Macroeconomic conditions are highly favorable toward consumer spending with low unemployment, modest wage gains, tax cuts, rising home values, record levels of consumer net worth and elevated consumer confidence levels," said Ken Perkins, the founder of Retail Metrics, in a note to clients this week.
To be sure, many companies "still face the need for heavy investments in logistics and last mile spend, in inventory management, in employees, in the introduction of AI & AR to their stores and ecommerce platforms, in differentiation initiatives among other needs that will weigh on profitability."
