NRF slashes holiday sales forecast

The National Retail Federation confirmed what many retailers already knew and made a downward revision to a holiday forecast that initially called for 3.7% growth.



Citing what it called “unforeseen events,” the National Retail Federation (NRF) said sales during November and December increased 3% to $626 billion, down from an earlier forecast which envisioned growth of 3.7%.



“Make no mistake about it, this was a tough holiday season for the industry,” said NRF president and CEO Matthew Shay. "Weather, inventory challenges, advances in consumer technology and the deep discounts that started earlier in the season and that have carried into January presented stiff headwinds as retailers competed with one another and their own bottom line. Despite these factors, the industry rallied, consumers responded and sales still grew at a healthy rate, which is a huge testament to the resilience, knowledge and expertise of our retail leadership.”



December retail sales, which exclude automobiles, gas stations and restaurants, decreased 0.2% seasonally adjusted from November and increased 3.1% unadjusted on a year-over-year basis, according to NRF.



“A double whammy of deflation and December weather constricted holiday sales growth as well as consumer spending,” said NRF chief economist Jack Kleinhenz. “The results of December’s retail sales remind us just how significant of an impact unusual weather can have on retail and overall economic activity. While the timing is uncertain there are positive prospects for improvement, including recent job gains that will help lift income and earnings, and a healthy housing market that should provide some support for spending in various retail sectors.”