New York–The National Retail Federation (NRF) predicts that retail sales will increase 5.6% this year, citing gains in consumer income and low interest rates. That’s just a slight rise from the 5.4% rise in retail sales last year.
Although the economy has been going through a “soft spot in activity,” said NRF chief economist Rosalind Wells on Jan. 13 during the NRF’s Annual Convention and Exposition, it will give way to “accelerated growth this year,” and sales trends will parallel overall economic improvement.
On the other hand, Wells warned that growth won’t come easily. Weak labor markets and “geopolitical risks,” including the threat of war in Iraq, will present challenges to marketers. “Until the economy gets through this ‘soft spot,’ retailers will need to use their ingenuity to attract shoppers to their stores,” she said. “Consumers will still feel compelled to seek out the best deal for their money.”