Retail Sales Will Advance 2.5% in 2010, NRF Says

February 10, 2010

U.S. retail sales will rise 2.5 percent this year as the housing and job markets stabilize, the National Retail Federation predicted. Click the link for more information!

By Lauren Coleman-Lochner and Esmé E. Deprez

Jan. 26 (Bloomberg) -- U.S. retail sales will rise 2.5 percent this year as the housing and job markets stabilize, the National Retail Federation predicted.

Economic improvement, including stronger exports, will buoy consumer confidence and spending, the Washington trade group said today in a statement. Sales fell 2.5 percent in 2009.

While consumers had pared spending in the face of rising joblessness and declines in home and stock values, some holiday sales data pointed to a potential rebound. U.S. holiday sales gained 1.1 percent to $446.8 billion, boosted by online sales and bargain-hunting in the week before Christmas, the NRF said earlier this month. It had forecast a 1 percent decline.

"As the labor market improves, so will consumer incomes -- the single most important ingredient for consumer spending," NRF Chief Economist Rosalind Wells said in the report. "Retailers will soon be able to reap the benefits of leaner, smarter inventories and a year and a half of pent up consumer demand," she said.

Discount stores and warehouse clubs that were popular with consumers during the holiday shopping season will remain "favored destinations," Wells said on a conference call. Middle-market retailers will be the most challenged, she said.

Retail sales should return to 2007 levels by 2011 if the economic recovery continues as forecast, Wells said on the call.

The retail figures don't include auto, gasoline or restaurant spending.

To contact the reporters on this story: Lauren Coleman-Lochner in New York at llochner@bloomberg.net; Esmé E. Deprez in New York at edeprez@bloomberg.net.

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