NRF projects retail decline in 2009
January 27, 2009,
Washington – For the first time since it began projecting annual retail sales in 1995, the National Retail Federation today forecast a sales decline for the year: The retailer trade association estimated sales in 2009 will decrease 0.5% compared to 2008.
NRF chief economist Rosalind Wells emphasized during a press conference earlier today the analysis is contingent upon fairly swift passage of an economic stimulus package. Failure to pass such a package – or a lengthy delay – would result in even sharper sales declines this year, she said.
“This downward cycle will not be easy to break,” said Wells, who noted consumer spending accounts for 70% of the gross national product. “We’re counting on the government to be the engine of recovery.”
NRF expects sales declines of 2.2% in the first quarter compared to the first quarter of 2008, then declines of 2.8% and 1.1% in the second and third quarters, respectively. The association forecast a sales increase of 3.4% in the fourth quarter.
The luxury and home categories are likely to be hardest hit this year as consumers focus on food and consumables. Discounters, off-pricers and warehouse clubs should benefit from consumers’ penurious shopping habits, said Wells. “Online will do better than brick-and-mortar stores, but even they will feel the impact,” she said.