NRF’s projection, part of its Retail Sales Outlook report, excludes sales by auto dealers, gas stations and restaurants. The trade group based its prediction on recent positive signs from indicators such as the housing market and employment, which are expected to boost consumer confidence as 2010 moves along. NRF also said U.S. retail sales fell 2.5 percent in 2009.
As the economy improves this year, “overall sentiment will begin to lift, making way for slight increases in consumer spending,” said Rosalind Wells, NRF’s chief economist. “While we still expect shoppers to continue to be frugal with their discretionary spending, retailers will soon be able to reap the benefits of leaner, smarter inventories and a year and a half of pent-up consumer demand.”
Among other positive indicators are trade, especially in the export sector; a turnaround in the inventory cycle; and government spending. Wells estimated that consumer spending will lag economic growth, but will still expand this year by from 2 percent to 2.5 percent.