NRF Forecasts 2019 Retail Sales Growth Of 3.8% To 4.4%

The National Retail Federation (NRF) has forecast that 2019 retail sales will increase 3.8% to 4.4% to reach more than $3.8 trillion. The online sales growth rate is expected to be 10% to 12%. Overall NRF projections outpace the 3.3% growth anticipated by eMarketer, but fall behind the 4.5% to 5.5% range expected by Moody’s.

“We believe the underlying state of the economy is sound,” said Matthew Shay, President and CEO of NRF in a statement. “More people are working, they’re making more money, their taxes are lower and their confidence remains high. The biggest priority is to ensure that our economy continues to grow and to avoid self-inflicted wounds. It’s time for artificial problems like trade wars and shutdowns to end, and to focus on prosperity not politics.”

Preliminary estimates show that retail sales in 2018 grew 4.6% over 2017 to $3.68 trillion, exceeding NRF’s forecast of at least 4.5% growth, with online sales jumping 10.4%. The lower growth projections for 2019stem from uncertainties resulting from a pending trade war with China, effects of the recent government shutdown and the fear that the U.S. economy will cool off.


Retailers so far have been able to largely mitigate the impact of new tariffs on steel, aluminum and goods from China imposed in the past year. However, tariffs could drive up the cost of consumer products and affect businesses’ direction and profits in 2019, particularly if tariffs on $200 billion in Chinese products rise from 10% to 25% as is currently scheduled to occur on March 1, according to Jack Kleinhenz, Chief Economist at NRF.

Unlike the other projections, the NRF sales forecast was released after Target and major department stores such as Macy’s, Kohl’s and Nordstrom already released holiday sales results. While the overall holiday season was positive across retail, with sales rising 5.1% in November and December, according to Mastercard SpendingPulse, individual announcements from the department stores were mostly underwhelming, prompting analysts to temper expectations for the year.

But despite these tempered expectations, high consumer confidence is likely to be a stronger indicator of how sales ultimately play out in 2019, meaning most retailers should still expect a positive year ahead.

“We are not seeing any deterioration in the financial health of the consumer,” said Kleinhenz in a statement. “Consumers are in better shape than any time in the last few years. Most important for the year ahead will be the ongoing strength in the job market, which will support the consumer income and spending that are both key drivers of the economy. The bottom line is that the economy is in a good place despite the ups and downs of the stock market and other uncertainties. Growth remains solid.”

NRF expects the overall economy to gain an average of 170,000 jobs per month, down from 220,000 in 2018. Unemployment — currently at 4% — is projected to drop to 3.5% by the end of the year, and gross domestic product (GDP) is likely to grow approximately 2.5% over 2018.

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