The National Retail Federation has upgraded its earlier retail forecast for 2016 as consumer spending is expected to remain solid for the remainder of the year. Sales are now expected to grow 3.4 percent, rather than 3.1 percent, an increase of 7 to 10 percent year-over-year, rather than the 6 to 9 percent forecasted earlier.
"Economic indicators are showing positive trends for retail," said NRF President and CEO Matthew Shay, noting the improved housing market, job growth, higher wages and other factors that have boosted consumer spending. "Challenges remain, with some greater than others depending on the retail category, but consumer confidence remains high and we believe that retail customers will continue the positive trends we have seen in the first two quarters of the year."
In the first half of the year, sales grew close to 4 percent year-over-year, and the NRF expects gross domestic product to grow between 1.9 and 2.4 percent.
Although many retail chains – such as Macy's, Kohl's and JCPenney – have given poor first and second quarter reports, the NRF has still reported slight upticks in sales, including a 2.1 percent rise in online sales between March and April.
The NRF does warn that other factors could get in the way of the optimistic outlook. For example, consumer uncertainty surrounding the presidential election, the rising dollar and a global slowdown. However, positive factors including favorable weather should help with winter merchandise.
- see this National Retail Federation press release