Consumer Behavior

Retail growth to dip a bit this year

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April 5, 2023

Retail sales growth will hit between 4% and 6% this year, reaching between $5.13 trillion and $5.23 trillion, according to the National Retail Federation.

Last year saw an annual 7% growth. The 2023 forecast is above pre-pandemic years that averaged an annual growth rate of 3.6%, according to a press release.

"In just the last three years, the retail industry has experienced growth that would normally take almost a decade by pre-pandemic standards," NRF President and CEO Matthew Shay said in the release. "While we expect growth to moderate in the year ahead, it will remain positive as retail sales stabilize to more historical levels. Retailers are prepared to serve consumers in the current economic environment by offering a range of products at affordable prices with great shopping experiences."

Non-store and online sales, which are included in the total figure, are expected to grow between 10% and 12% year over year to a range of $1.41 trillion to $1.43 trillion. As the role of brick-and-mortar stores has evolved in recent years, they remain the primary point of purchase for consumers, accounting for approximately 70% of total retail sales.

"While it is still too early to know the full effects of the banking industry turmoil, consumer spending is looking quite good for the first quarter of 2023," NRF chief economist Jack Kleinhenz said in the release. "While we expect consumers to maintain spending, a softer and likely uneven pace is projected for the balance of the year."