World's largest retail trade association, National Retail Federation (NRF) announces that the consumers may be forced to find new sources for spending power.
The National Retail Federation (NRF) released its 2006 forecast, predicting that retail industry sales (which exclude automobiles, gas stations, and restaurants) will increase 4.7 percent from last year.
In its quarterly Retail Sales Outlook Report, released this morning at NRF's 95th Annual Convention & EXPO, NRF expects a slowdown in the economy and consumer spending to restrain industry sales gains.
A stronger than expected 2005 saw retail sales increase 6.1 percent, slightly higher than the 5.6 percent gain NRF had been forecasting. However, tough comparisons, rising energy costs and a slowdown in the housing market have caused NRF to expect subdued retail sales growth in 2006.
“With the housing market beginning to slow, consumers will be challenged to find new sources of spending power.” said NRF Chief Economist Rosalind Wells.
“The strong retail sales we saw in the second half of 2005 will be replaced by more conservative spending in the New Year.” NRF expects 2006 first quarter retail sales to increase 5.0 percent, compared to gains of 6.5 percent in the fourth quarter of 2005.
The Federal Reserve will play a major role in the consumer's ability to bounce back in 2006. As Ben Bernanke takes over, NRF expects the Fed policy of vigilance toward inflation to continue. In the near-term, underlying inflationary pressures appear to be under control.
marketing@alchempro.com
