That’s according to the latest forecast from the National Retail Federation (NRF), which unveiled its retail sales forecast during its annual State of Retail and the Consumer live event. For 2022, the association predicts retail sales will reach between $4.86 trillion and $4.95 trillion, representing a growth of 6% to 8% over 2021 sales. NRF’s prediction excludes automobile and gas sales, as well as restaurants.
The sales growth is expected despite major economic headwinds, including inflation pressures on consumers, rising gas prices and more.
“We expect a durable recovery for the rest of the year,” NRF CEO Matthew Shay said during the presentation. “Last year retail [sales] grew 14% in 2021 during one of the most challenging times for our nation's economy. … [The year] culminated in a record holiday season.”
However, Shay recognized that “this pace of growth may not be sustainable––it may not even be healthy.”
Online sales, which were included in the overall forecast, are expected to rise between 11% and 13% this year, to a range of $1.17 trillion to $1.19 trillion. The high growth rate follows trends accelerated during the COVID-19 pandemic as consumers turned to e-commerce for their purchases.
Other pandemic trends have carried in 2022 as well, including consumers’ desires for more transparency around values from retailers they shop with. For example, retailers that care about the environment and work to make their company and products more sustainable may find more loyalty among some consumers. However, being transparent about values, including social justice issues, also comes with a risk. If a company appears to be disingenuous about their actions, the act could backfire.
“It is hard,” Sucharita Kodali, vice president and principal analyst of retail at Forrester, said during the presentation. “Retailers are stuck between a rock and a hard place. They are being asked to take a stand on issues, could be environmental, gender equity issues, wage pressure. At the same time, they in many cases would rather stay neutral because they may not have the goods to back up what they are being asked to support. It's a challenge for retailers and something every merchant in the future will have to grapple with.”
Throughout the rest of the year, NRF anticipates strong job and wage growth and declining unemployment.The GDP is expected to slow to 3.5%, with inflation playing a big role in cooling the economy.
“Most households have never experienced anything like this level of inflation, and it is expected to remain elevated well into 2023,” NRF Chief Economist Jack Kleinhenz said. “In addition to inflation, the forces impacting the economy include COVID-19 impacts, international tensions and policy variability.