Another banner year is in store for the nation’s retailers—big and small—online and in-store. The National Retail Federation (NRF) announced its 2023 forecast this morning during its third annual State of Retail & the Consumer virtual conversation, projecting retail sales will increase 4%-6% this year, reaching between $5.13 trillion and $5.23 trillion.
This anticipated growth compares with the 7% annual growth retail sales had in 2022, reaching $4.9 trillion in total sales last year compared to 2021.
Online sales, which are included in the total amount, are also expected to grow to between $1.41 trillion and $1.43 trillion, an increase of 10%-12% from 2022. Putting this growth into context, the NRF explains that “while many consumers continue to utilize the conveniences offered by online shopping, much of that growth is driven by multichannel sales, where the physical store still plays an important component in the fulfillment process. As the role of brick-and-mortar stores has evolved in recent years, they remain the primary point of purchase for consumers, accounting for approximately 70% of total retail sales.”
These optimistic projections come amidst a more mixed economic picture. The NRF projects that the nation’s GDP will only grow about 1%, down from last year’s 2.1% increase. It also expects inflation to decrease but hover between 3% and 3.5% for all goods and services this year.
And it adds that although the labor market has remained resilient, the NRF anticipates “job growth to decelerate in the coming months in lockstep with slower economic activity and the prospect of restrictive credit conditions. The unemployment rate is likely to exceed 4% before next year.”
More immediately, the NRF projects consumers will spend $24 billion on Easter this year, up from last year’s $20.8 billion and topping the record-setting $21.7 billion spent in 2021.
Easter spending is expected to increase across several categories, including candy ($3.3 billion), gifts ($3.8 billion), and food ($7.3 billion). Shoppers are also expected to spend $4 billion on clothing, $1.8 billion on flowers, $1.7 billion on decorations, and $1.1 billion on greeting cards.
Overall, what’s remarkable is that, according to NRF president and CEO Matthew Shay, “In just the last three years, the retail industry has experienced growth that would normally take almost a decade by pre-pandemic standards. [And] while we expect growth to moderate in the year ahead, it will remain positive as retail sales stabilize to more historical levels. Retailers are prepared to serve consumers in the current economic environment by offering a range of products at affordable prices with great shopping experiences.”
Retail stock image by Monkey Business Images/Shutterstock