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NRF expects 2015 second half to be more robust in sales activity

While the NRF's initial sales expectations aren't what they were back in February there is still a big bright spot ahead for retailers in the second half of 2015.

July 28, 2015

The fact the National Retail Federation’s initial retail sales predictions have changed due to a slew of factors shouldn’t give retailers big pause for major worry as the industry group noted that the revision has more to do with a small squall of mitigating events rather than any substantial consumer shopping trend or economic outlook.

In fact, in a posting about the retail sales outlook there was even brighter news and expectations than in February when the NRF released its initial projections. At that time the group forecast a 4.1-percent increase through 2015. But bad weather, a strong U.S. dollar, declines in energy segment investments and even West Coast port disruptions combined to kick that forecast in the proverbial rear.

“Given that we are now at the mid-point of the year, it’s important to reassess where the industry stands as it relates to overall expected sales growth. There are plenty of factors to consider, and given the fluctuations in economic activity through the first half of the year, we believe it is necessary to adjust for the significant variances seen thus far in sales and consumer spending,” wrote NRF Chief Economist Jack Kleinhenz.

At this point retail sales will likely increase 3.5 percent and online and non-store sales are expected to grow between 6 and 8 percent.

“However, recent economic indicators do suggest that the economy is turning a corner, fortunately putting to rest any concerns that the expansion has stalled,” states Kleinhenz, adding that his second quarter estimates are above 2 percent and that the second half of this year will be much more rewarding for retailers. One reason is strong gains in employment ranks.

“Real consumer demand has actually been stronger than what nominal retail sales have indicated, and deflationary pricing is helping keep receipts low for U.S. households. Going forward, retail sales should register further strength, and resilient consumers should never be counted out,” Kleinhenz said. He did conclude his post with a slight cautionary sentence however.

“As for the economy, we believe we’ll see continued growth but recognize that there are critical potential 'tipping points,' including foreign markets and wage growth.”