Shoppers wear protective masks inside the Glendale Galleria Mall in Glendale, California, on Thursday, May 6, 2021.
Bing Guan | Bloomberg | Getty Images
One of the country’s largest retail groups, the National Retail Federation, bolstered the industry’s outlook for the year on Wednesday, saying it anticipates “the fastest growth we̵
Retail sales are expected to grow between 10.5% and 13.5% to an estimated total value of $ 4.44 trillion to $ 4.56 trillion by 2021 as the economy returns from the pandemic and customers spend money they have socked away , said NRF Chief Economist Jack Kleinhenz at a virtual event. The forecast includes retail and online sales, but excludes car dealers, petrol stations and restaurants.
That compares with $ 4.02 trillion in total retail sales in 2020 and $ 3.76 trillion in 2019.
The industry group had expected in February that retail sales would increase between 6.5% and 8.2%, equivalent to more than $ 4.33 trillion in this year’s sales.
The NRF also increased its projection for GDP growth for the full year to approx. 7% compared to the 4.4% and 5% expected earlier in the year. It said it predicts pre-pandemic production levels to return in this fiscal quarter.
Kleinhenz said government stimulus has flowed through the economy and into consumer wallets. It boosts customers’ appetite for spending money and a faster-than-expected recovery, he said.
“We see clear signs of a strong and resilient economy,” he said, adding that households “are ready to resume some normality in living, working and playing.”
Despite the rosy forecast, the retail industry still faces challenges, including inflation, congested ports and a shortage of workers. U.S. retail sales stopped in April, after rising 10.7% in March, according to the Department of Commerce. Retail sales in May have not yet been announced.
It is also unclear how much of consumers’ wallets are shifting to services and other spending priorities, such as hotel stays, airline tickets and dining instead of consumer goods.
Many retailers, including Walmart, Levi’s and Macy’s, recently reported strong first quarters and raised their own forecasts for the year. Business executives have said they see consumers coming out of the house, planning social gatherings and shopping in their loungewear for denim and dresses.
Macy’s CEO Jeff Gennette said in a earnings call in May that the company expects “pent-up demand opportunities” will continue as shoppers buy luggage, shoes, new clothes and makeup.
“We do not see this as a short-lived pop,” he said.