The National Retail Federation (NRF) lowered its retail sales forecast for 2015 because of unexpected slow growth recorded during the first half of the year, similar to the industry’s experience in 2014. However, NRF expects sales will steadily increase through the remainder of the year. The trade association forecasted in February that retail sales would grow 4.1 percent in 2015 over 2014, but revised that expectation down to 3.5 percent.
NRF calculated that sales grew 2.9 percent during the first half of 2015 and are expected to grow at a more positive pace of 3.7 percent over the next five months. The estimates include general retail sales and non-store sales, and exclude automobiles, gas stations and restaurants. Revised non-store sales are now expected to grow between 6 and 8 percent, still within the 7 to 10 percent range originally forecast.
“A confluence of events, including treacherous weather throughout the U.S. through most of the winter, issues at the West Coast ports, a stronger U.S. dollar, weak foreign growth and declines in energy sector investments all significantly and negatively impacted retail sales so far this year, and thus have changed how future sales will shape up for the rest of 2015,” said NRF Chief Economist Jack Kleinhenz. “Additionally, household spending patterns appear to have shifted purchases toward services and away from goods, though this may be transitory. Additionally, a deflationary retail environment has been especially challenging for retailers’ bottom lines.”
Added NRF President and CEO Matthew Shay, “We are optimistic that consumer spending during the second half of the year will benefit from recent improvements in the housing and labor markets along with lower energy costs, and believe consumer confidence will grow enough to bolster retail purchases for the year.”
NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores.