Last week, the National Retail Federation (NRF) forecasted its outlook for retail sales this year.

According to this industry group, retail sales are expected to increase 3.5 percent to between $5.23 trillion and $5.28 trillion. Non-store and online sales included in the above figure are forecasted to grown in a range of between 7 percent and 9 percent year-over-year, equating to a range of $1.47 trillion to $1.5 trillion.

The 2024 forecast compares to the sales growth of $5.1 trillion in 2023 which reflects a 3.6 percent annual growth rate. Non-store and online sales were reportedly $1.38 billion last year.

Our Supply Chain Matters commentary highlighting NRF’s initial report actual 2023 holiday period sales indicated that core retail sales during the 2023 holiday season rose 3.8 percent over 2022, to a record high of $964.4 billion. The prior record of $929.5 billion occurred in the 2022 period. Online and non-store sales during the 2023 holiday period reportedly rose 8.2 percent to $276.8 billion.

Underlying Assumptions

The NRF is assuming U.S. full-year GDP growth of upwards of 2.3 percent this year, a slower growth rate than the 2.5 percent growth rate experienced in 2023. Inflation is expected to moderate to 2.2 percent this year, reportedly due to a cooling economy.

The trade group indicates that a tight labor market is expected to cool this year, and with the pace of the U.S. economy slowing, there will be 100,00 fewer jobs on average per month and that the unemployment rate will average 4 percent for the full year.


Highlights of the State of Retail Webcast

The above forecast of U.S. retail came in conjunction with this trade group’s State of Retail and the Consumer webcast event.

Commenting on the first two months of the year, NRF executives indicated that consumer confidence remains positive as evidenced by reported retail spending in January and February. Much of the spending was attributed to events such as the NFL Super Bowl. That stated, executives pointed to recent survey data reinforcing that upwards of 50 percent of U.S. consumers are prioritizing what they need vs. what they want.

An interview among Matthew Shay, the President and CEO of NRF, and John Furner, Walmart’s U.S. CEO, and serving as chair of the NRF board provided insightful observations.

Furner observed that the U.S. economy is at its lowest unemployment levels in 60 years, leading to increased household net worth and a rather resilient U.S. consumer. He added that operating in customer-centric dimensions has significantly changed during the last 2 to 3 years. It requires far more listening and talking with consumers.

Further observed is that stubborn inflation levels, primarily in the food and grocery sector has caused consumers to continue to be careful with what they purchase. Observed was that inflation levels related to the service economy are higher such as vacation related airline travel, auto repair, concert tickets or other experience events. Therefore, the mix of food and non-food has played a more important factor.

CEO Shay observed that consumer convenience remains the underlying trend that sustains retail growth, especially in online retail. He further noted that retailers need to be comfortable with market uncertainty as the continued new normal.

Furner, Walmart U.S. CEO described that state of retail supply chains as much more stable than it has been in years. He noted that Walmart specifically is in better shape in this retailer’s ability to act more flexibly and to be able to pivot more quickly when supply chain disruptions occur. Furner noted that supply chain disruption will accelerate at a faster pace. Regarding a shift toward more U.S. sourcing of retail products, Furner indicated that two-thirds of Walmart products sold in the U.S. are now sourced to domestic providers.



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