NRF Forecasts Slower Sales Growth In 2007

The National Retail Federation (NRF) recently released its 2007 forecast, predicting retail industry sales (which exclude automobiles, gas stations and restaurants) will increase 4.8 percent from last year. According to its quarterly Retail Sales Outlook report, released at NRF’s 96th Annual Convention & Expo, the organization expects subdued first half economic growth to give way to accelerated sales in the second half.

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.

As a result of the slowdown in housing, sales increases at building material and garden equipment stores experienced a sharp deceleration last year. Strong gains of 20 percent at the beginning of the year slid to -4.3 percent at year’s end. Other categories, such as general merchandise stores, apparel specialty stores, health and personal care stores, and food and beverage retailers maintained steady sales gains in the mid single digit range.

According to the Outlook, 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 increase 4.8 percent.

For more information, please visit www.nrf.com.