Looks like this year won't be quite as good for retailers as they expected.
The National Retail Federation (NRF) says unexpected slow growth recorded during the first half of the year, similar to the industry’s experience in 2014, has prompted it to lower its retail sales forecast for 2015.
NRF forecasted in February that retail sales would grow 4.1 percent in 2015 over 2014, but today’s revision lowers the forecast to 3.5 percent. However, NRF expects sales will steadily increase through the remainder of the year.
Back in February, the retailing trade organization forecasted 4.1% growth in sales for 2015. The revision lowers it to 3.5%.
“For years consumer spending has been hampered by lackluster growth in our economy,” said NRF President and CEO Matthew Shay. “Much of that blame can be shifted to Washington where too much time has been spent crafting rules and regulations that almost guarantee negative consequences for consumers and American businesses alike.” Until the government and our elected leaders “get serious about enacting policies that lift consumer confidence, create economic growth and spur investment,” he added, “we will continue this trend of solid, but not exceptional, performance in the economy.”
NRF calculated that sales grew 2.9% during the first half of 2015 and are expected to grow at a more positive pace of 3.7% over the next five months. The estimates include general retail sales and non-store sales, and exclude automobiles, gas stations and restaurants. Revised non-store sales are now expected to grow between 6-and-8%, still within the 7-to-10% range originally forecast.
“A confluence of events, including treacherous weather throughout the United States through most of the winter, issues at the West Coast ports, a stronger U.S. dollar, weak foreign growth and declines in energy sector investments all significantly and negatively impacted retail sales so far this year, and thus have changed how future sales will shape up for the rest of 2015,” said NRF Chief Economist Jack Kleinhenz. “Additionally, household spending patterns appear to have shifted purchases toward services and away from goods, though this may be transitory. Additionally, a deflationary retail environment has been especially challenging for retailers’ bottom lines.”