According to economists and industry experts who spoke at the National Retail Federation Retail Big Show Tuesday at Javits Center, sluggish growth will continue this year.
Paula Campbell Roberts, executive director, research, at Morgan Stanley, told retailers that they will likely see”sluggish growth for a long time, unless there is something on a global level that shocks the economy.”
In 2015, total retail sales rose 2.1% over 2014, according to U.S. Department of Commerce figures released last week. The retail panelists said Tuesday that they expect to see similar growth this year.
The NRF reported on Friday that holiday sales (excluding automobiles, gasoline and restaurants) rose 3% percent in 2015, missing the NRF’s holiday forecast for 3.7% growth.
Jack Kleinhenz, chief economist for the NRF, said that missing the forecast made 2015 “from some perspectives a disappointing year.” However, he said, people should realize that 3% growth “ain’t all that bad.”
Kleinhenz added that many retailers missed forecasts in part because early discounting in October pulled sales away from November, and that lower prices resulted in lower sales totals. Retailers, are being hurt by a shift in spending away from clothes and other goods and toward experiences such as travel or health and wellness treatments.
Spending on Experiential
Consumers “are spending more on themselves than on goods,” he said.
Shawn Dubravec, chief economist at the Consumer Technology Association, said there was a “clear loss of momentum in consumer spending at the end of 2015, but it is hard to tell if it was caused by a larger trend or a response to temporary issues.”
The problem with forecasting sales, he said, is “it’s always something – this time last year we were talking about abnormal amounts of snowfall” hurting holiday sales. This year, unusually warm weather is being blamed for weak sales.
What could really throw the small growth off kilter would be uncertainty or unexpected events such as terrorism, political turmoil here and abroad because consumers tend to curb their spending when they are unsure about what’s ahead.
An area that continues to see big gains: online retail. New data from Adobe Digital Index found that online sales hit a record $83 billion in November and December, easily beating the firm’s expectations.
According to Adobe, online sales rose 12.7% during the final two months of the year, surpassing its forecast for 11% growth. It also marks a slight acceleration from 2014, when Adobe said holiday sales increased by 12%.
According to Adobe, which compiles its data from 1 trillion visits to more than 4,500 retail websites, digital sales surged 56% year over year in the week prior to Christmas, to $920 million. That compares with an average week’s growth of 40%.