The nation’s largest retail trade group, the National Retail Federation, is cautiously optimistic about the upcoming year-end shopping season, saying Tuesday that it expects spending to increase by 4.1 percent. If shoppers match the federation’s forecast of $616.9 billion in purchases, it will be the country’s largest year-end-shopping-season growth since 2011.
Last year, retail sales in November and December rose 3.1 percent, to $592.6 billion, falling short of the federation’s original forecast of 3.9 percent growth. Consumer confidence that year was shaken by a lengthy government shutdown in October.
Shop.org, the online division of the federation, is forecasting that online sales will grow between 8 percent and 11 percent this year-end shopping season, with online sales topping $105 billion. Online sales, while growing at more than twice the pace as in-store sales, remain less than 15 percent of total year-end-shopping-season sales.
Year-end sales in 2012 and last year were disappointing compared with the more robust growth of 2010 and 2011, when sales climbed 5.3 percent and 4.8 percent, respectively.
The retail federation is hoping that 2014 will end better than it began. The year started with expectations that consumers finally were ready to spend, after post-recession wariness. However, American shoppers have continued to exercise caution. “The lagging economic recovery, though improving, is still top of mind for many Americans,” said Matthew Shay, President and CEO of the National Retail Federation, in a statement.
Shay said that while the federation’s forecast for sales growth is “upbeat,” he expects shoppers to continue to be “extremely price sensitive as they have been for quite some time.” That sentiment is expected to fuel sales promotions and discounting in November and December.
The federation’s chief economist, Jack Kleinhenz, said that while consumer spending and income growth have been only moderate so far this year, there is reason for optimism about the year-end shopping season. “In the grand scheme of things, consumers are in a much better place than they were this time last year,” Kleinhenz said in a statement.