NRF Forecasts Retail Sales to Grow Between 6.5% and 8.2% in 2021
The National Retail Federation (NRF) is anticipating that retail sales will grow between 6.5 percent and 8.2 percent in 2021, the trade group announced yesterday. This would bring the total sales to more than $4.33 trillion.
“Despite the continuing health and economic challenges COVID-19 presents, we're very optimistic that healthy consumer fundamentals, pent-up demand, and widespread distribution of the vaccine will generate increased economic growth, retail sales and consumer spending,” NRF President and CEO Matthew Shay said in the press release. “From the outset of the pandemic, retailers have gone above and beyond even the most conservative safety guidelines to protect and serve their associates and consumers alike. Retailers are increasingly engaged in working with federal, state and local health officials to distribute and administer the vaccine. This partnership has been key to our economic health throughout the pandemic and will continue this year.”
The NRF forecasted that retail sales would grow at least 3.5 percent in 2020, which didn't factor in the impact of the COVID-19 pandemic. In reality, early results show that retail sales almost doubled that prediction, with 6.7 percent growth and sales totaling nearly $4.06 trillion.
With many consumers shifting to e-commerce, online sales grew by 21.9 percent. This year, the NRF is forecasting e-commerce sales will grow between 18 percent and 23 percent, to between $1.14 trillion and $1.19 trillion in sales. This growth is included in NRF’s total retail sales projection.
“The trajectory of the economy is predicated on the effectiveness of the vaccine and its distribution,” NRF Chief Economist Jack Kleinhenz said in the press release.
The NRF believes that as more Americans get vaccinated, it will accelerate economic growth mid-year. This would be the fastest growth the economy has seen in over two decades.
Total Retail's Take: The NRF's forecast paints a rosy picture for the retail industry, and our economy in general. Retailers are slowly starting to announce their outlooks for 2021, but they're still filled with much uncertainty due to the COVID-19 pandemic. A significant factor in the NRF's bullish forecast is dependent on how effective the coronavirus vaccine is and how smoothly distribution goes. However, it's encouraging to see such growth is expected after such a challenging year for so many retailers and brands. In order to tap into this growth, retailers would be wise to invest in optimizing their e-commerce sites as more shopping takes place online.
Ashley Chiaradio is the Senior Content Strategist at Total Retail. Ashley has been creating content for more than 7 years, and provides a unique insight in covering the retail industry having worked directly for retailers in the past. She’s passionate about profiling women leadership in the space.