New York City, Subdued economic growth could moderate retail sales in 2007, according to the National Retail Federation’s (NRF) annual industry forecast. In its quarterly Retail Sales Outlook report, NRF predicted that for the year as a whole, retail industry sales (which exclude automobiles, gas stations and restaurants) will be up 4.8%. In 2006, retail sales increased 6.3%.
“This year, slow economic growth will be reflected in moderate consumer and retail sales gains,” said Rosalind Wells, chief economist for the NRF. “The quarterly industry sales pattern will be the opposite of last year with modest gains early in the year and better increases in the second half.”
Current retail trends will persist throughout the year, according to Wells. Luxury retailers will continue to outperform other retail sectors, online shopping will continue to escalate, and department stores should continue their resurgence. Retailers catering to the lower- and mid-level-income consumer will be challenged when it comes to increasing their sales. A soft housing market will impact the demand for home-related merchandise.