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The National Retail Federation forecasts retail sales growth between 6.5% and 8.2% in 2021, with the sales total reaching as much as $4.4 trillion.
Online sales are expected to rise 18% and 23% to between $1.14 trillion and $1.19 trillion.
The 2021 forecast is based largely on the continued rollout of the COVID-19 vaccine, which the group says will help to “propel the economy.”
In 2020, early results show 6.7% growth to $4.06 trillion with spending shifting in favor of goods and away from services. Online and other non-store sales soared 21.9% to $969.4 billion as shoppers moved their purchases online.
See: Opinion: Don’t expect an economic boom, because there’s little pent-up consumer demand
NRF experts expect a shift back to services in 2021 as the economy reopens. Spending overall will benefit from high levels of savings and a pickup in wages and jobs.
“The consumer has purchasing power and is willing to spend,” said Jack Kleinhenz, the NRF’s chief economist, on a call with media.
The NRF forecasts gross domestic product growth of 4.5% to 5%.
“Despite the continuing health and economic challenges COVID-19 presents, we are very optimistic that healthy consumer fundamentals, pent-up demand and widespread distribution of the vaccine will generate increased economic growth, retail sales and consumer spending,” said NRF Chief Executive Matthew Shay in a statement.
Retailers and brands that have reported earnings over the past couple of weeks also anticipate a spending rebound, though continued uncertainty has kept many from offering guidance.
“Our principal assumption is that that the vaccination will be effective and permits accelerated growth during the mid-year. The economy is expected to see its fastest growth in over two decades,” said Kleinhenz in a statement.
Also: CVS says it will reach millions of new customers as it administers COVID vaccine
The worst case scenario, according to Kleinhenz, would be that the vaccines are proven ineffective against variants of SARS-CoV-2, which have been detected in the U.S.
Shares of essential retailers like Walmart Inc. WMT, -1.67% and Costco Wholesale Corp. COST, -0.42% have rallied over the past year as others in areas like apparel have suffered.
The Amplify Online Retail ETF IBUY, +0.11% has skyrocketed 153.6% over the last year. The SPDR S&P Retail ETF XRT, +5.29% is up 92.4%. And the benchmark S&P 500 index SPX, +1.14% is up 25.5% for the period.
