NRF Predicts Holiday Sales to Increase 3.7%

(IDEX Online News) – The National Retail Federation NRF) has announced that it expects sales in November and December (excluding autos, gas and restaurant sales) to increase 3.7 percent to $630.7 billion – significantly higher than the 10-year average of 2.5 percent.

Holiday sales in 2015 are expected to represent approximately 19 percent of the retail industry’s annual sales of $3.2 trillion. Additionally, NRF is forecasting online sales to increase between 6-8 percent to as much as $105 billion.

“With several months of solid retail sales behind us, we’re heading into the all-important holiday season fully expecting to see healthy growth,” said NRF president and CEO Matthew Shay.

“However, while economic indicators have improved in several areas, Americans remain somewhat torn between their desire and their ability to spend; the fact remains consumers still have the weight of the economy on their minds, further explaining the complex retail spending environment we are seeing right now. We expect families to spend prudently and deliberately, though still less constrained than what we saw even two years ago.”

He said that potential disruptions from another government shutdown in mid-December and a slower pace of job creation and income growth will impact holiday shoppers’ spending this year. “Price, value and even timing will all play a role in how, when, where and why people shop over the holiday season. Retailers will be competitive not only on price, but on digital initiatives, store hours, product offerings and much more.”

"Similar to last year in the sense we’re coming off a rather disappointing first half, this holiday season brings to light several crosscurrents that still exist for American households,” said NRF chief economist Jack Kleinhenz. “While confidence data is encouraging, slower job growth in 2015, deflationary retail prices and the mix of consumer spending somewhat shifting toward big ticket items and services, as well as the wild card in our government spending debates, will all contribute to the slower growth rate of sales expected for the holiday season.”

“All said, there’s no reason to doubt that we will see solid retail sales growth in the final two months of the year,” continued Kleinhenz.