U.S. retail sales are expected to continue to grow this year, according to a new estimate from the National Retail Federation (NRF).
Overall retail sales will rise between 6.5 percent and 8.2 percent to more than USD 4.33 trillion (EUR 3.5 trillion) in 2021 as COVID-19 vaccinations increase and the economy reopens, the NRF said in its 2021 forecast.
Online sales, which are included in the total, are expected to grow between 18 percent and 23 percent to between USD 1.1 trillion and USD 1.2 trillion (EUR 906 billion and EUR 989 billion), NRF predicted.
“Despite the continuing health and economic challenges COVID-19 presents, we are very optimistic that healthy consumer fundamentals, pent-up demand and widespread distribution of the vaccine will generate increased economic growth, retail sales, and consumer spending,” NRF President and CEO Matthew Shay said in a press release.
NRF expects the U.S. to add between 220,000 and 300,000 jobs per month in 2021, depending on the pace of the overall economy in the second and third quarters.
Despite the economy’s stalled momentum at the end of last year, NRF forecasts real gross domestic product growth at between 4.5 and 5 percent in 2021.
“The trajectory of the economy is predicated on the effectiveness of the vaccine and its distribution,” NRF Chief Economist Jack Kleinhenz said. “Our principal assumption is that that the vaccination will be effective and permits accelerated growth during the mid-year. The economy is expected to see its fastest growth in over two decades.”
This year marks the second year of savings, record-high stock valuations, increased home prices, enhanced government support, and record low interest rates, which are all contributing factors towards the economy and consumer spending behavior, Kleinhenz said.
Households will still consume retail goods, according to NRF, but will turn to services – which typically account for 70 percent of consumer spending – as they are able.
NRF’s early results show that overall retail sales grew 6.7 percent in 2020 to nearly USD 4.1 trillion (EUR 3.4 trillion), nearly doubling NRF’s forecast of at least 3.5 percent growth, which did not account for the impact of a global pandemic.
Conversely, overall retail sales ticked up 3.9 percent in 2019.
Meanwhile, online and other non-store sales skyrocketed to 21.9 percent of overall retail sales to reach USD 969.4 billion (EUR 798 billion) in 2020.
The 2020 November-December holiday season accounted for nearly one-fifth (19.4 percent) of overall annual retail sales.
“Retail sales during this period grew an unexpectedly high 8 percent to USD 787.1 billion (EUR 648 billion),” NRF said.
Non-store and other online sales represented USD 206.9 billion (EUR 170 billion) of total holiday sales, up 22.6 percent over the year before.
Food and beverage sales grew around 11.5 percent in 2020, according to NRF.
Photo courtesy of LADO/Shutterstock
