NRF Predicts 4.8% Increase in 2007 Retail Sales

January 23, 2007  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on January 2007 The National Retail Federation has released its 2007 forecast, predicting retail industry sales (which exclude automobiles, gas stations, and restaurants) will increase 4.8 percent over last year.

According to its quarterly Retail Sales Outlook report, NRF expects subdued first half economic growth to give way to accelerated sales in the second half. The prediction excludes automobiles, gas stations and restaurants.

Retail sales increased 6.3 percent in 2006. The stronger-than-expected sales surge was fueled by robust consumer spending in the first half of the year. As expected, the sales picture weakened in the second half as consumer spending power was challenged by the housing slowdown, high energy costs and lackluster employment growth.

“This year, slow economic growth will be reflected in moderate consumer spending and retail sales gains,” said NRF Chief Economist Rosalind Wells. “The quarterly industry sales pattern will be the opposite of last year with modest gains early in the year and better increases in the second half.”

According to the association, industry sales gains of 3.8 percent in the first quarter should increase to 4.6 percent in the second, 5.2 percent in the third, and 5.7 percent in the final quarter. For the year as a whole, industry sales are expected to be up 4.8 percent.

Current retail trends will persist throughout the year. Luxury retailers will continue to outperform. Online shopping will continue to escalate. Retailers catering to the lower and mid-level income consumer will find achieving sales gains more challenging. Demand for merchandise related to the home will be impacted by a soft housing market.