National Retail Federation Raises Annual Sales Forecast
26 July 2016 - 8:50PM
Dow Jones News
The National Retail Federation expects 2016 to turn out a little
better than expected, forecasting U.S. retail sales rising 3.4%
thanks to a stronger start to the year and a continuing shift to
online sales.
The rate is up slightly from an initial forecast of 3.1% that
the trade group issued in February, and puts the pace of growth in
line with last year's. The NRF also raised its forecast for online
sales to increase between 7% to 10% this year, slightly better than
its prior expectation, as the shift to e-commerce accelerates.
The midyear revision follows better than expected sales growth
of 4% in the first half of the year, according to the retail
industry group, which excludes sales from car dealerships, gasoline
stations and restaurants in its calculations.
The brighter forecast comes as many traditional retailers
struggled in the first months of the year as unseasonably warm
weather sapped demand for winter clothes. Macy's Inc. reported its
worst quarterly sales since the recession, while Kohl's Corp. and
Nordstrom Inc. both reported sinking sales at existing stores.
Wal-Mart has eked out small sales gains, while Target Corp. is
projecting its first quarterly sales decline in two years in the
coming quarter.
But newcomers like Hennes & Mauritz AB's H&M chain and
discounters like TJX Cos. have continued to expand. Dollar stores
like Dollar General Corp. have provided another bright spot,
growing sales and opening stores as low-income shoppers trade
down.
The NRF projects a slower growth rate over the coming months and
into the critical holiday season. NRF Chief Economist Jack
Kleinhenz said that retailers may maintain some momentum after the
first half of the year, but upcoming challenges include lackluster
wage growth, ongoing deflation and uncertainty around the coming
presidential election.
"I don't foresee the pace of growth in the first half to
continue into the second half," Mr. Kleinhenz said in an interview.
"It's still very tepid."
Most retailers won't report second quarter results for a few
weeks but Amazon.com Inc. is slated to report Thursday while Under
Armour Inc. will release its second quarter results Tuesday.
Write to Paul Ziobro at Paul.Ziobro@wsj.com
(END) Dow Jones Newswires
July 26, 2016 06:35 ET (10:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Amazon.com (NASDAQ:AMZN)
Historical Stock Chart
From Aug 2024 to Sep 2024
Amazon.com (NASDAQ:AMZN)
Historical Stock Chart
From Sep 2023 to Sep 2024