Consumer confidence faded last month, but the National Retail Federation (NRF) said things will get better—and retailers will reap the rewards.
The Washington, D.C.-based trade association upgraded its outlook for 2016 on Tuesday, announcing that retail sales for the year are expected to grow 3.4% over last year, slightly more than the 3.1% forecast in February. Within that, online and other non-store sales are projected to rise 7 to 10 percent, compared to the 6 to 9 percent increase from earlier in the year.
“Economic indicators are showing positive trends for retail,” said Matthew Shay, president and chief executive officer, citing the improved housing market, job growth, higher wages and other factors that have spurred consumer spending. “Challenges remain, with some greater than others depending on the retail category, but consumer confidence remains high and we believe that retail customers will continue the positive trends we have seen in the first two quarters of the year.”
Despite challenges at Macy’s, Kohl’s, Nordstrom and Neiman Marcus, to name a few, the first half of 2016 was “solid.” According to NRF’s calculations, retail sales (excluding cars, gas and restaurants) were up by nearly 4 percent.
“There are many factors that could prove to be hurdles but our overall outlook is optimistic,” NRF’s chief economist, Jack Kleinhenz, said. “Uncertainty surrounding the presidential election could make consumers more cautious, and the combination of a rising dollar and global slowdown have impacted exports, but other factors like favorable weather patterns that will help move winter merchandise support our outlook.”