New York City, With energy costs rising and the housing market starting to cool off, retail sales are projected to increase a modest 4.7% in 2007 compared to the more robust 6.1% gain in 2005, according to the National Retail Federation (NRF). The tepid sales forecast was issued Monday, during the NRF’s annual convention in New York City.
“With the housing market beginning to slow, consumers will be challenged to find new sources of spending power,” said NRF chief economist Rosalind Wells. “The strong retail sales we saw in the second half of 2005 will be replaced by more conservative spending in the New Year.”
Although NRF is cautious about the 2006 outlook, Wells predicted that several categories of specialty retailing should continue to experience steady sales growth, including clothing and accessories, food and beverage, and health and personal care. Attractive pricing and strong demand will continue to fuel strong demand for electronics, according to Wells.