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Retail sales will grow by 10.5 to 13.5 percent this year, compared to 2020, and will exceed $4.44 trillion, the National Retail Federation (NRF) has forecast.
In February, the NRF predicted growth of just 6.5 to 8.2 in retail sales percent this year.
“The economy and consumer spending have proven much more resilient than initially forecasted,” NRF CEO Matthew Shay said in a statement updating the group’s outlook.
The forward view was brightened by a new round of stimulus spending and an accelerating vaccination campaign, the Wall Street Journal reported.
The forecast includes online and in-person retail sales but not purchases of vehicles, gasoline, or restaurant meals.
Last year’s retail sales totaled about $4.02 billion, with $920 billion spent online, the NRF said; this year, sales in venues other than physical stores will expand by 18 to 23 percent, reaching $1.09 to $1.13 trillion.
In April compared to March, more money was spent on restaurant meals and less on clothing, furniture, and sporting goods as customers began to adjust spending to a post-shutdown world.
While many retailers struggled last year to establish an online presence and adapt to customers who were no longer buying clothes for work or kids’ clothes for school, major retailers such as Amazon and Walmart thrived.
Now retailers across the spectrum seem to be seeing customers return in numbers, the NRF said; Target reported good first-quarter sales in apparel and beauty products, two categories that weakened last year.
TRENDPOST: Even during the 2020 crisis, the Bigs coasted while Mom and Pop struggled to survive and, in many cases, failed. Consumers have yet to equate their shopping at Amazon and other online venues with the disappearance of their favorite bookstore or independently-owned shoe shop – or, if they do see the relationship, they have decided that convenience is more important than the survival of their local, decentralized economy.
And, as we have forecast, the Biden Bounce will be temporary and will slow down when the free money to the unemployed begins to dry up. And as the numbers show, retail sales declined in May and as we reported, while they have shown spikes in recent months, consumers are buying less, but because of inflation it costs them more, thus artificially driving up retail numbers.