Through the challenges of this past year, the industry’s retail partners remained diligent and enabled us all to succeed in a time when we might not have thought it possible. As we continue moving toward life after the pandemic, the retail industry has once again hit its stride, prompting the National Retail Federation (NRF) to revise its 2021 forecast. The NRF now predicts that retail sales will grow 10.5 to 13.5 percent, ultimately topping $4.44 trillion this year.
“The economy and consumer spending have proven to be much more resilient than initially forecasted,” President and CEO Matthew Shay said. “The combination of vaccine distribution, fiscal stimulus, and private-sector ingenuity have put millions of Americans back to work. While there are downside risks related to worker shortages, an overheating economy, tax increases, and over-regulation, overall households are healthier, and consumers are demonstrating their ability and willingness to spend. The pandemic was a reminder how essential small, mid-size, and large retailers are to the everyday lives of Americans in communities nationwide.”
Released at NRF’s inaugural State of Retail and the Consumer event, the revised forecast surpasses the organizations original projection of at least 6.5 percent growth which was made in February 2021. According to a release, the initial forecast was made when there was still great uncertainty about consumer spending, vaccine distribution, virus infection rates, and additional stimulus plans.
The NRF now predicts that 2021 retail sales will come in between $4.44 trillion and $4.56 trillion, with non-store and online sales—included in the figure—expected to grow 18–23 percent to a range of $1.09 trillion to $1.13 trillion. The forecast excludes automobile dealers, gasoline stations, and restaurants.
The updated numbers compare with $4.02 trillion in total retail sales in 2020, of which $920 billion was from purchases made through non-store and online channels.
“We are seeing clear signs of a strong and resilient economy,” NRF Chief Economist Jack Kleinhenz said. “Incoming data suggests that U.S. economic activity continues to expand rapidly, and we have seen impressive growth. Most indicators point toward an energetic expansion over the upcoming months and through the remainder of the year.”
Supporting the idea of economic resiliency, NRF is also projecting full-year GDP growth to approach 7 percent, compared with 4.4 percent and 5 percent earlier this year. Pre-pandemic levels of output are also expected to return this quarter.
Kleinhenz went on to explain that the amount of both fiscal and monetary policy intervention has lifted personal income, filling the well of income that was lost back in March and April 2020, creating an overabundance of purchasing power. Given the strength of consumer spending, he also noted he anticipates the fastest growth the U.S. has experienced since 1984.
To listen to a recording of the State of Retail and the Consumer event, click here.
Is it possible that the retail industry will see even more growth than predicted? No matter the case, Deli Market News will be sure to report.