NRF: U.S. retail sales to grow 6.5% to 8.2% in 2021

The group said its strong outlook depended on the effectiveness of Covid vaccines and their rollout over the rest of 2021. It said it expected the U.S. economy to grow at its fastest pace in two decades.

The National Retail Federation said Wednesday that retail sales are expected to grow 6.5% to 8.2% this year, to more than $4.33 trillion, as the U.S. economy begins to reopen and more people get vaccinated against Covid.

The industry's leading trade group said preliminary data showed retail sales grew 6.7% last year to $4.06 trillion, driven largely by a nearly 22% increase online despite the health and economic crisis caused by the pandemic .

Throughout the year, more Americans turned to websites and apps to buy food , comfortable clothes and household goods.

The NRF predicts that e-commerce sales will grow 18% to 23% this year, to between $1.14 trillion and $1.19 trillion. "The trajectory of the economy depends on the effectiveness of the vaccine and its distribution," NRF Chief Economist Jack Kleinhenz said in a statement.

"Our main assumption is that ... the vaccine will be effective and allow growth to accelerate by mid-year. The economy is expected to grow at the fastest pace in the past two decades," he said .

Kleinhenz added that the conditions have been in place this year for continued consumer savings, record high stock valuations, rising home prices and record low interest rates, all of which contribute to the NRF's forecast of a strong economic rebound.

The trade group further expects that as Americans become more comfortable traveling again and attending social gatherings, more money will be spent on services, which typically account for 70% of consumer spending .

“We are optimistic that healthy consumer fundamentals, pent-up demand, and widespread distribution of vaccines will bolster economic growth, retail sales, and consumer spending,” said NRF President and CEO Matthew Shay.

Some retailers have begun to glimpse what they can expect for the year. But those forecasts are often fraught with uncertainty.

Macy's , for example , said this year will be one of recovery and rebuilding after a sharp drop in sales in 2020. However, it has not yet factored in expectations for a rebound in international tourism.

Home Depot , which benefited from strong growth as more Americans invested in its home products during the pandemic , did not provide a full-year outlook when it reported earnings earlier this week. Chief Financial Officer Richard McPhail said the retailer was unsure how long the outbreak would last and how it would affect consumer spending.

NRF

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Retail Sales