Retail Sales To Rise 4.1 Percent In 2014, NRF Says

By Anna Rose Welch, Editorial & Community Director, Advancing RNA

Despite a slow start to the year, retailers plan innovations, develop strategies to draw shoppers

The NRF is expecting retail sales (excluding automobiles, gas stations, and restaurants) to increase 4.1 percent in 2014. Similarly, as more consumers begin and end their shopping online, the NRF also predicts that online sales will increase by 9 to 12 percent.

A Solution For The Omni-Channel Retailer

This forecast is based on several key factors. As the housing market continues to strengthen, so should household and business confidence, resulting in more spending. Similarly, unemployment rates are expected to keep falling throughout the year. By the end of 2014, unemployment is expected to be 6.5 percent or lower as the labor market averages roughly 185,000 jobs per month. Overall, economic growth is expected to come in above its long-term historical average. Early estimates for economic growth as measured by real GDP could fall between 2.6 and 3 percent, which is certainly an improvement from last year’s estimated 1.9 percent rate.

NRF president Matthew Shay says the NRF is “cautiously optimistic and hopeful that the economic tides will change in 2014.” There are of course, still lingering concerns about debt ceiling debates, health care costs, and regulations that will affect consumers and retailers alike this year. Not to mention, the New Year has already brought with it several challenges that have affected the retail industry, including weather, domestic, and global financial issues, NRF chief economist Jack Kleinhenz says.

Indeed, as Reuters reports, January sales were a good demonstration of how cautious consumer spending continues to be. While January is traditionally when consumers come in to redeem gift cards and complete any post-holiday shopping, last month’s extremely low temperatures and snowy conditions in the Midwest and Northeast negatively impacted retailers’ monthly comparable sales. According to Thomson Reuters, nine retailers that report monthly comparable sales posted a 3.6 percent rise for January. However, this is much below the 4.9 percent pace from last year. Retailers Kohl’s and Sam’s Club in particular, registered slumps in comparable store sales for January. Other brands including Gap, Victoria’s Secret (L Brands), and Costco saw increases, though L Brands admitted that profit margins would be taking a hit as a result of steeper discounts and longer sales events.  

While January left something to be desired for various retailers, companies have a whole year yet to plan and perfect strategies that will enable them to learn more about and better meet customers’ needs. According to the NRF, geolocation targeting to provide consumers with relevant promotions at key moments in the path to purchase, as well as the rise of mobile payments, “name your own price” tools, and innovation labs are all on the agenda for retailers this coming year.

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