Sales now expected to top $4.44 trillion this year.
Retail sales are doing better than initially expected earlier in the year.
The National Retail Federation has revised its annual forecast for 2021, projecting that retail sales will now grow between 10.5% and 13.5% to between $4.44 trillion to $4.56 trillion this year. In February, NRF projected that retail sales would grow 6.5%.
By comparison, retail sales totaled $4.02 in 2020. Non-store and online channels accounted for $920 billion of purchases.
“The initial forecast was made when there was still great uncertainty about consumer spending, vaccine distribution, virus infection rates and additional fiscal stimulus, prior to passage of the American Rescue Plan Act,” according to NRF.
NRF expects non-store and online sales to rise between 18% and 23% to a range of $1.09 trillion to $1.13 trillion. Those numbers exclude automobile dealers, gasoline stations and restaurants.
Helping drive sales will be GDP growth. NRF projects that to approach 7%, compared with the 4.4% and 5% forecasted earlier this year. During this quarter, the economy should hit pre-pandemic levels of output.
“We are seeing clear signs of a strong and resilient economy,” NRF Chief Economist Jack Kleinhenz said in a prepared statement. “Incoming data suggests that US 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.”
Personal income has risen because of the sheer amount of both fiscal and monetary policy intervention, which has created an overabundance of purchasing power, according to Kleinhenz. With this rise in spending, he anticipates the fastest growth the US has experienced since 1984.
“The economy and consumer spending have proven to be much more resilient than initially forecasted,” NRF President and CEO Matthew Shay said in a prepared statement. “The combination of vaccine distribution, fiscal stimulus and private-sector ingenuity has put millions of Americans back to work.”
Other sources are also showing a strengthening sales environment. The NPD Group said discretionary retail sales revenue in the US increased by 17% over the first half of the year and rose 18% over 2019 levels, suggesting that the uptick in consumer spending predicted by many experts post-pandemic is beginning to materialize.
With the potential for a strong recovery, the stores that survived the pandemic should be prepared to grow.
COVID forced some retailers to restructure their balance sheets. But, now, the retailers that made it to the other side have shown the resilience to stick around.
“Now, you feel like there are fewer question marks because we’re on the other side,” John Hofmann, commercial production team leader for KeyBank told GlobeSt.com in an earlier interview. “If a retail center performed well in COVID and the retailers were strong in COVID, we feel good. We see less uncertainty in the retail sector than we did pre-COVID.”