Customers wearing protective masks leave a Uniqlo store in San Francisco, California, on Wednesday, February 17, 2021.
David Paul Morris | Bloomberg | Getty Images
Retail sales are expected to grow this year between 6.5% and 8.2%, worth more than $ 4.33 billion in sales, as the U.S. economy begins to reopen and more and more individuals receive the Covid vaccine, the National Retail Federation said on Wednesday.
A preliminary reading shows that retail sales rose 6.7% to $ 4.06 trillion last year, the industry trade group said, despite the economic and health challenges posed by the pandemic. This was largely driven by an increase of almost 22% online.
Throughout the year, several Americans turned to websites and apps to buy food, comfortable clothes, and household items. The numbers exclude car dealers, gas stations and restaurants.
This year, NRF forecasts that e-commerce sales will increase by 18% to 23%, to $ 1.14 trillion and $ 1.19 trillion in sales. This increase is included in the NRF’s total retail sales projection.
“The trajectory of the economy is based on the effectiveness of the vaccine and its distribution,” Jack Kleinhenz, chief economist at the NRF, said in a statement.
“Our main assumption is that vaccination will be effective and allow for accelerated growth in the middle of the year,” he said. “The economy is expected to grow the fastest in two decades.”
Kleinhenz added that this year is already shaping up to see continued consumer savings, record stock assessments, rising house prices and record interest rates, all of which are contributing to NRF projections for a robust economic recovery.
The trade group still expects that as Americans become more comfortable traveling and attending social gatherings again, more money will be spent on services, which normally account for 70% of consumer spending.
“We are very optimistic that the healthy foundations of consumers, the accumulated demand and the widespread distribution of the vaccine will generate increased economic growth, retail sales and consumer spending,” said NRF President and CEO Matthew Shay.
Some retailers have started to take a look at their expectations for that year. Macy’s, for example, said that this year will be one for recovery and reconstruction, after suffering sharp declines in sales in 2020. But it still does not include in its expectations any return in international tourism.
Home Depot, which benefited from strong growth as more Americans invested in their homes during the pandemic, did not offer a year-round outlook when it reported earnings earlier in the week. Chief Financial Officer Richard McPhail said the retailer is not sure how long the pandemic will last and how it could affect consumer spending.
Read the full press release from NRF here.