Retail sales expected to reach $5.23 trillion in 2023
Non-store and online sales growth is expected to jump higher, by about 10% and 12% to as much as $1.42 trillion, according to the NRF. But as it noted, much of those gains are multichannel, meaning the retailer’s physical store still plays a role in the fulfillment process.
Retailers across sectors have revamped their e-commerce strategies following shifts in consumer behavior driven by the pandemic. Retailers from Target to Macy’s and others in essential categories, such as drug stores, grocers and convenience stores, have allocated in-store space to digital order fulfillment, focused on their pick-and-pack and delivery offerings and also used third-party partners, such as DoorDash and Instacart.
“In just the last three years, the retail industry has experienced growth that would normally take almost a decade by pre-pandemic standards,” said Matthew Shay, NRF’s president and CEO, in a release. “While we expect growth to moderate in the year ahead, it will remain positive as retail sales stabilize to more historical levels. Retailers are prepared to serve consumers in the current economic environment by offering a range of products at affordable prices with great shopping experiences.”
The NRF this week noted that inflation has decreased, but is still expected to remain between 3% and 3.5% for all goods and services. It also expects that the unemployment rate will pass 4% by the end of this year.
As Retail Leader Pro recently reported, while the U.S. is not technically in a recession, consumers are feeling the impact of economic hurdles, like inflation and higher interest rates. Shoppers are changing behaviors, reducing their spending in categories such as restaurants and entertainment. Retailers that focus on value, sales and promotions — and communicate that value to customers — are likely to win this year, said Elizabeth Lafontaine, chief analyst for Retail Leader Pro.
“Clear value messaging is the way forward for the retail industry in the short term as consumers continue to focus on making trade-offs and protecting their discretionary income,” she said. “Even retailers that cater to higher-income consumers need to ensure that value for price is communicated to mitigate pullback.”