NRF Forecasts 4.8% Retail Growth for 2007
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.
Circuit City to Open New Prototype
New York City, Circuit City Stores Inc. will be rolling out a new prototype store in June, according to a report by Reuters. John Mulleady, VP for real estate and construction at Circuit City, announced the prototype at the National Retail Federation’s (NRF) annual conference in New York City on Sunday.
Although he did not give many details, Mulleady said the prototype would build on the consumer electronics retailer’s efforts to continually test new store types to better appeal to today’s shoppers. Mulleady said Circuit City is working on building 300 new stores in the next two years.
While Circuit City has stores in Canada, Mulleady said “not today” when asked if the retailer was looking at additional international expansion.
Wal-Mart Selects New Ad Agencies
Bentonville, Ark., Wal-Mart Stores Inc. said on Friday it selected agencies from Interpublic Group of Cos. and France’s Publicis for its advertising work. Interpublic’s Martin Agency will take the lead in handling creative work on the account, while Publicis agency MediaVest will be responsible for media planning and buying.
Wal-Mart put its estimated $580 million advertising account up for review in December, just days after the departure of a key marketing executive and barely one month after a previous review assigned the work to sister Interpublic agency DraftFCB and Aegis Group media buyer Carat.
Wal-Mart also named three agencies to focus on the black, Asian and Hispanic communities in the United States: GlobalHue, IW Group and Lopez Negrete.