NRF: Retail Sales to Decline in 2009

Retail sales – excluding car sellers, gas stations and restaurants – are expected to decline 0.5% this year, according to the National Retail Federation’s 2009 economic forecast. This marks the first time the trade group projected a decline since it started tracking annual sales in 1995. The  weakness is a result of consumers cutting back discretionary purchases and shopping differently in a recessionary environment. 


“Shoppers will be seeking value, and trading down to discount and off-price retailers in order to stretch their purchasing power,” said chief economist Rosalind Wells.


A 2.5% decline is expected in the first half of the year and a 1.1% drop in the third quarter. A 3.6% increase is expected in the fourth due to “easy comparisons” from the 2008 holiday season, as well as a likely pick up in the economy by the end of the year.

NRF: Retail Sales to Decline in 2009

Retail industry sales – excluding those logged at automobile sellers, gas stations and restaurants – are expected to decline 0.5% this year, the National Retail Federation said in its 2009 economic forecast. This marks the first time that the trade group has projected a decline in annual retail sales since it started tracking them in 1995.


The NRF said the sales weakness is a result of consumers cutting back in their discretionary purchases as well as many shopping differently in a recessionary environment.


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


The NRF's quarter-by-quarter outlook calls for a 2.5% sales decline in the first half of the year. It estimates sales to decrease 1.1% in the third quarter followed by a 3.6% increase in sales in the fourth quarter.


However, the firm qualified the projected 3.6% increase in the fourth quarter, saying that much of that improvement will likely be due to “easy comparisons” from the 2008 holiday season, as well as a likely pick up in the economy by the end of the year.


The NRF had expected last year's holiday sales to increase 2.2%, but the trade group said the final result for the two months combined was a much worse decline of 2.8%.

 

Share This