In their annual forecast, The National Retail Federation (NRF) anticipates that retail sales will grow between 6.5 percent and 8.2 percent to more than $4.33 trillion in 2021 as people get vaccinated and the economy reopens.
Early results show that retail sales in 2020 grew 6.7 percent over 2019 to $4.06 trillion, nearly doubling NRF’s forecast of at least 3.5 percent growth, which did not account for the impact of the Covid-19 pandemic. This figure compares with 3.9 percent growth in 2019. As we saw during the pandemic, e-commerce boomed. Online and other non-store sales (which are included in the total figure), skyrocketed to 21.9 percent at $969.4 billion as consumers shifted to e-commerce. The numbers exclude automobile dealers, gasoline stations and restaurants. In 2021, Online sales, are expected to grow between 18 percent and 23 percent to between $1.14 trillion and $1.19 trillion.
The growth in retail sales projects the economy to gain between 220,000 and 300,000 jobs per month (depending on the pace of the overall economy in the second and third quarters). Despite the economy’s stalled momentum at the end of 2020, NRF forecasts real GDP growth between 4.5 percent and 5.0 percent.
Backing up NRF’s analysis, expansions are outpacing closures in the retail market thus far. US retailers have announced 3,199 store openings and 2,548 closures year-to-date, according to a tracking by Coresight Research. To that end, the real estate market, presents an opportunity for growth in 2021. Chances are they will pay less in rent with more flexible lease terms. A glut of vacancies has left landlords more desperate to fill space and sign deals they would not have considered pre-Covid. So much so that e-commerce juggernaut Amazon has been opening more physical stores. Amazon began building a grocery chain during the pandemic (in addition to Whole Foods). The company has opened 11 Amazon Fresh stores around the U.S., with plans for at least 28 more, as it tries to lure mainstream shoppers.