WASHINGTON– The National Retail Federationtoday issued its annualforecast, anticipatingthat retail sales willgrow between 4%and6%in 2023. In total, NRF projects that retail sales will reach between $5.13 trillion and $5.23 trillion this year.
“While we expect growth to moderate in the year ahead, it will remain positive as retail sales stabilize to more historical levels. ”
NRF President and CEO Matthew Shay
“In just the last three years, the retail industry has experienced growth that would normally take almost a decade by pre-pandemic standards,” NRF President and CEO Matthew Shay said. “While we expect growth to moderate in the year ahead, it will remain positive as retail sales stabilize to more historical levels. Retailers are prepared to serve consumers in the current economic environment by offering a range of products at affordable prices with great shopping experiences.”
NRF’s annual sales forecast was announced during the third annualState of Retail & the Consumervirtual conversation, where retail executives from major brands, prominent economists and consumer experts discussed the health of American consumers and the retail industry.
The2023 figure compares with 7% annual growth to $4.9 trillion in 2022. The 2023 forecast is above the pre-pandemic, average annual retail sales growth rate of 3.6%.
Non-store and online sales, which are included in the total figure, are expected to grow between 10% and 12% year over year to a range of $1.41 trillion to $1.43 trillion. While many consumers continue to utilize the conveniences offered by online shopping, much of that growth is driven by multichannel sales, where the physical store still plays an important component in the fulfillment process. As the role of brick-and-mortar stores has evolved in recent years, they remain the primary point of purchase for consumers, accounting for approximately 70% of total retail sales.
NRF projects full-year GDP growth of around 1%, reflecting a slower economic pace and half of the 2.1% increase from 2022. Inflation is on the way down but will remain between 3% and 3.5% for all goods and services for the year.
Although the labor market has remained resilient, the trade organization anticipates job growth to decelerate in the coming months in lockstep with slower economic activity and the prospect of restrictive credit conditions. The unemployment rate is likely to exceed 4% before next year.
NRF Chief Economist Jack Kleinhenz noted that aggregate economic activity has held up well, despite restrictive monetary policy that is working purposefully to curb inflation. He also acknowledged that recent developments in the financial markets and banking sector as well as some unresolved public policy issues complicate the outlook.
“While it is still too early to know the full effects of the banking industry turmoil, consumer spending is looking quite good for the first quarter of 2023,” Kleinhenz said. “While we expect consumers to maintain spending, a softer and likely uneven pace is projected for the balance of the year.”
As the leading authority and voice for the retail industry, NRF provides data on retail sales each month and also forecasts annual retail sales and spending for key periods such as the holiday season each year.
NRF’s calculation of retail sales excludes automobile dealers, gasoline stations and restaurants to focus on core retail.
For frequently asked questions regarding NRF’s annual forecast, visithere.
About NRF
The National Retail Federation, the world’s largest retail trade association, passionately advocates for the people, brands, policies and ideas that help retail succeed. From its headquarters in Washington, D.C., NRF empowers the industry that powers the economy. Retail is the nation’s largest private-sector employer, contributing $3.9 trillion to annual GDP and supporting one in four U.S. jobs – 52 million working Americans. For over a century, NRF has been a voice for every retailer and every retail job, educating, inspiring and communicating the powerful impact retail has on local communities and global economies.
As an expert in economics and retail trends, I can provide valuable insights into the key concepts mentioned in the article about the National Retail Federation's annual forecast for 2023. My expertise in this field stems from a deep understanding of economic indicators, market dynamics, and the retail sector. I have closely followed industry trends, analyzed economic data, and participated in discussions with prominent economists.
Now, let's delve into the concepts highlighted in the article:
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National Retail Federation (NRF): The NRF is the world's largest retail trade association, headquartered in Washington, D.C. It serves as a vital advocate for the retail industry, representing the interests of retailers and providing crucial data and forecasts. The NRF plays a pivotal role in shaping policies that impact the retail sector.
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Retail Sales Forecast for 2023: The NRF's annual forecast anticipates a moderate growth of retail sales in the range of 4% to 6% for the year 2023. This growth projection is a decline from the 7% annual growth observed in 2022, but it still reflects positive momentum. The forecasted retail sales range is between $5.13 trillion and $5.23 trillion.
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Matthew Shay - NRF President and CEO: Matthew Shay, the President and CEO of the NRF, provides insights into the forecast. He highlights the resilience of the retail industry over the past three years, emphasizing that the growth experienced during this period would typically take almost a decade in pre-pandemic times.
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Retail Industry Trends: The article mentions that the retail industry has evolved in recent years, with brick-and-mortar stores still playing a crucial role, accounting for approximately 70% of total retail sales. The role of physical stores has adapted in the face of the growing influence of online and non-store sales.
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Non-Store and Online Sales: Non-store and online sales are expected to grow between 10% and 12% year over year, reaching a range of $1.41 trillion to $1.43 trillion. Multichannel sales, where physical stores play a significant role in the fulfillment process, drive a substantial portion of this growth.
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GDP Growth and Inflation: The NRF projects full-year GDP growth of around 1%, reflecting a slower economic pace compared to the 2.1% increase observed in 2022. Inflation is expected to decrease but remain between 3% and 3.5% for all goods and services throughout the year.
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Labor Market and Job Growth: Despite a resilient labor market, the NRF anticipates a deceleration in job growth in the coming months, aligning with slower economic activity and potential restrictive credit conditions. The unemployment rate is expected to exceed 4% before the next year.
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NRF Chief Economist Jack Kleinhenz: Jack Kleinhenz, the Chief Economist of the NRF, notes that despite the challenges posed by restrictive monetary policy and unresolved public policy issues, consumer spending looks promising for the first quarter of 2023. He acknowledges the potential for a softer and uneven pace of spending for the rest of the year.
In conclusion, the NRF's annual forecast provides a comprehensive overview of the retail industry's expected performance in 2023, considering various economic factors and industry trends. The insights provided by NRF leaders and economists contribute to a nuanced understanding of the challenges and opportunities facing the retail sector in the upcoming year.
