NRF Predicts 2020 Retail Sales Will Grow as Consumers Continue to Drive Economy
Despite uncertainty from the coronavirus, presidential election and lingering trade war, the National Retail Federation (NRF) forecasts that retail sales will increase between 3.5 percent and 4.1 percent to more than $3.9 trillion in 2020, it announced in a press release yesterday. Matthew Shay, NRF president and CEO, said in the press release that consumers continue to drive the economy as the nation's record-long economic expansion continues. He also noted that since household incomes are rising and interest rates are decreasing, he expects a healthy year ahead, even with uncontrollable uncertainties that may arise. "When it comes to the fundamentals, our economy is sound and consumers continue to lead the way," Shay said.
NRF reported retail sales grew 3.7 percent during 2019, which just falls short of its forecast of 3.8 percent growth. Based on NRF's 2020 forecast, retail sales should total between $3.93 trillion and $3.95 trillion this year. The NRF is forecasting online sales, which are included in the total, will grow between 12 percent and 15 percent to between $870.6 billion and $893.9 billion.
Jack Kleinhenz, NRF chief economist, explained that unemployment remains near a 50-year low, and low interest rates are encouraging consumers to buy homes, prompting them to spend more on furniture and other home-related products.
However, some factors are unpredictable. Kleinhenz explained that while consumers and small business owners are confident, corporate CEOs are cautious over trade policy as well as the upcoming presidential election. NRF's forecast also assumes that coronavirus doesn't become a global pandemic, but sales could be impacted if factory shutdowns in China continue further into the year.
Total Retail's Take: The NRF's forecast for 2020 is great news for the retail industry. If retail sales do increase between 3.5 percent and 4.1 percent this year, it figures to have a positive impact on retailers both big and small, and across product verticals. While the NRF has been relatively on target with its consumer spending predictions in the past, 2020 is setting up to be a very unpredictable year. It will be interesting to see if uncontrollable factors, such as the trade war with China, upcoming presidential election, and coronavirus outbreak, cause retail sales to not reach forecasted levels. So much is still up in the air about the coronavirus that it's hard to say just how much of an effect it will have on the retail industry, particularly product supply chains.
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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.