The National Retail Federation (NRF) released its third annual State of Retail & the Consumer forecast, anticipating that retail sales will grow between 4% and 6% in 2023. In total, NRF projects that retail sales will reach between $5.13 trillion and $5.23 trillion this year.
While NRF expects growth to moderate in the year ahead, it will remain positive as retail sales stabilize. The 2023 figure compares with 7% annual growth in 2022. The 2023 forecast is above the pre-pandemic average annual retail sales growth rate of 3.6%.
Retail is the nation’s largest private-sector employer, contributing $3.9 trillion to the annual GDP. The retail sector supports one in four U.S. jobs, or 52 million working Americans.
Non-store and online sales, which are included in the total figure, are expected to grow between 10% and 12% year over year to a range of $1.41 trillion to $1.43 trillion. While many consumers continue to utilize the conveniences offered by online shopping, much of that growth is driven by multichannel sales, where the physical store still plays an important component in the fulfillment process. As the role of brick-and-mortar stores has evolved in recent years, they remain the primary point of purchase for consumers, accounting for approximately 70% of total retail sales.
NRF projects full-year GDP growth of around 1%, reflecting a slower economic pace and half of the 2.1% increase from 2022. Inflation is on the way down but will remain between 3% and 3.5% for all goods and services for the year.
Although the labor market has remained resilient, the trade association anticipates job growth to slow in the coming months in lockstep with slower economic activity and the prospect of restrictive credit conditions. The unemployment rate is likely to exceed 4% before next year.
As the leading authority and voice for the retail industry, NRF provides data on retail sales each month and also forecasts annual retail sales and spending for key periods such as the holiday season each year.
NRF’s calculation of retail sales excludes automobile dealers, gasoline stations, and restaurants to focus on core retail.
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