The National Retail Federation (NRF) issued its revised annual retail forecast for 2021, anticipating that retail sales will now grow between 10.5 percent and 13.5 percent to more than $4.44 trillion this year as the economy accelerates its pace of recovery from the Covid-19 pandemic.
NRF now forecasts that 2021 retail sales are estimated to total between $4.44 trillion to $4.56 trillion. Non-store and online sales, which are included in the total figure, are expected to grow between 18 percent and 23 percent to a range of $1.09 trillion to $1.13 trillion as consumers continue to utilize e-commerce. The numbers exclude automobile dealers, gasoline stations and restaurants.
The updated figure compares with $4.02 trillion in total retail sales in 2020. Of that, $920 billion was from purchases made through non-store and online channels.
In addition, NRF now projects full-year GDP growth to approach 7 percent, compared with the 4.4 percent and 5 percent forecasted earlier this year. Pre-pandemic levels of output are expected to return this quarter.
There are of course some challenges, despite this retail forecast, such as tight supply chains, inflation, and a shortage of workers. Consumer prices jumped 5 percent in May, though the inflation is mostly a result of supply chain issues. “The strength in the top line indices was driven largely by categories that have been heavily disrupted by COVID and remain under pressure from supply chain disruptions,” wrote Eric Wingorad, senior economist at Alliance Bernstein.
All in all, this is the fastest anticipated growth in the US since 1984. “The economy and consumer spending have proven to be much more resilient than initially forecasted,” NRF President and CEO Matthew Shay said. “The combination of vaccine distribution, fiscal stimulus and private-sector ingenuity have put millions of Americans back to work. The pandemic was a reminder how essential small, mid-size and large retailers are to the everyday lives of Americans in communities nationwide.”