NRF: Slow growth for retail sales in 2008
January 14, 2008

New York—Retail sales, excluding automobiles, gas stations and restaurants, are expected to increase just 3.5 percent in 2008 compared with 2007, according to the National Retail Federation (NRF)’s quarterly Retail Sales Outlook report released today.

The NRF anticipates the slow pace in sales growth—the lowest growth since 2002, when sales rose 3 percent—to continue before picking up in the second half of the year.

“Consumers will be under financial stress from high energy costs, the fallout from the housing slump and sluggish employment and income growth,” NRF Chief Economist Rosalind Wells said in a statement. “Shoppers will seek to pay down debt, spend more in line with income growth and approach discretionary purchases with more restraint.”

While the outlook is somewhat reserved, the NRF expects industry sales to increase 3.2 percent in the first half of the year, followed by a 3.8 percent increase in the second half as economic conditions improve.

“Retailers will once again be forced to market to more practical consumers, many of whom will be looking to trade down,” Wells said. “Even areas of past high growth such as luxury goods and online shopping will feel the pressure. In 2008, the challenges will be formidable for everyone.”