Retail sales in 2016 are expected to mirror 2015, and continue the current pattern of slow, steady but not very exciting growth, according to economists and industry experts who spoke at the National Retail Federation convention Tuesday.
The nation’s merchants likely will see “sluggish growth for a long time, unless there is something on a global level that shocks the economy,” said Paula Campbell Roberts, executive director, research, at Morgan Stanley, who participated in a panel discussion for press at the annual retail gathering at the Javits Convention Center in New York City.
Close to 34,000 retail professionals are attending the four-day gathering this year, looking for ways the boost store sales, which disappointed during the recent holiday season. More than 500 vendors are at the convention pitching high-tech solutions including ways to send messages to shoppers over their cell-phones, or payment methods that let consumers skip the checkout line.
In 2015, total retail sales rose 2.1 percent over 2014, according to U.S. Department of Commerce figures released last week. The retail panelists said Tuesday that they expect to see similar growth this year.
The NRF reported on Friday that holiday sales – excluding automobiles, gasoline and restaurant meals – rose 3 percent in 2015, missing the federation’s forecast of 3.7 percent sales growth in November and December.
Jack Kleinhenz, chief economist for the NRF, said Tuesday that missing the forecast made 2015 “from some perspectives a disappointing year.” However, he said, people should realize that 3 percent growth “ain’t all that bad.”
Individual retailers have been reporting mixed holiday results, with some, including The Children’s Place in Secaucus and Wayne-based Toys “R” Us, saying their holiday sales strongly outpaced the previous year’s, while other retailers reported declines.
Softness in retail sales extended to the luxury sector, which had been insulated from the overall retail downturn.
Luxury jeweler Tiffany reported Tuesday that its global holiday sales declined 9 percent and U,S holiday sales fell 10 percent, reflecting problems in the Chinese economy and a drop in foreign tourism in this country.
Kleinhenz Tuesday said retailers missed forecasts in part because early discounting in October pulled sales away from November, and that lower prices resulted in lower sales totals. Retailers, Kleinhenz said, are being hurt by a shift in spending away from clothes and other goods and toward experiences such as travel or health and wellness treatments.
Consumers, Kleinhenz said, “are spending more on themselves than on goods.”
Shawn Dubravec, chief economist at the Consumer Technology Association, said there was a “clear loss of momentum” in consumer spending at the end of 2015, but it is hard to tell if it was caused by a larger trend or a response to temporary issues.”
The problem with forecasting sales, he said, is “it’s always something – this time last year we were talking about abnormal amounts of snowfall” hurting holiday sales. This year, unusually warm weather is being blamed for weak sales.
Dubravec is relatively optimistic about 2016. Last year, he said, “was defined by unevenness” and “we expect less unevenness in 2016.”
However, the panelists noted that uncertainty or unexpected events, such as terrorism or other global problems, or even upheaval caused by the presidential election, will hurt retailers, because consumers tend to curb their spending when they are unsure about what’s ahead.
BY JOAN VERDON
January 18, 2016