National Retail Federation expects holiday sales to rise

Associated Press

NEW YORK

With stores closing and retailers filing for bankruptcy, a trade group says it still expects holiday sales to at least match the 3.6 percent growth of a year ago, as online shopping keeps increasing and improving wages may put people in a mood to spend.

The National Retail Federation said Tuesday it expects sales in November and December to rise 3.6 percent to 4 percent, to a range of $678.75 billion to $682 billion. It’s the first time the group forecast in a range rather than by a fixed percentage, because the impact of several big hurricanes is still uncertain.

Retailers fighting the dominance of Amazon are trying to reinvent themselves and are being forced to close if they don’t do it fast enough. Dozens of retail chains have filed for bankruptcy this year, and hundreds of stores have closed – particularly among those dependent on clothing sales. Toys R Us is reorganizing in bankruptcy at a critical time of year. Holiday sales account for nearly 20 percent of the annual industry sales total.

But online spending is still growing strongly, which accounts for some of the optimism, and stores that are doing well include off-price chains, dollar stores and discounters.

“Retail is not dead,” said NRF CEO Matthew Shay. “It’s transforming.”

Holiday forecasts from Deloitte, the International Council of Shopping Centers and AlixPartners have come in around the same level, ranging from growth of 3.5 percent to 4.5 percent. PwC predicts that holiday spending will rise 6 percent, but that includes travel and entertainment. Other forecasts exclude restaurants and travel.

The NRF forecast – which considers economic indicators such as consumer credit, disposable personal income and monthly retail sales – excludes sales from autos, gas and restaurants but includes online spending and other nonstore sales such as those from catalogs. It estimates that online spending and other nonstore sales will rise 11 percent to 15 percent.