NRF issues bullish 2022 retail sales forecast

While there is more than a healthy share of uncertainty in logistics and the supply chain, one thing that remains certain, is the ongoing aggressive pace of United States retail sales activity, with consumers continuing to spend on whatever it is they may need, amid record-high gas prices, inflation, fears of a recession, and the Russia-Ukraine conflict, among other factors.

That was made clear in data issued by the Washington, D.C.-based National Retail Federation (NRF) this week, in its 2022 retail sales forecast.

In its forecast, the NRF is calling for 2022 retail sales to see an annual increase between 6%-to-8%, coming in at between $4.86 trillion-to-$4.95 trillion. NRF’s numbers come with the caveat that they do not include sales data from automobile dealers, gasoline stations and restaurants. 

And it added that non-store and online sales year-over-year, which are included in the total figure, are expected to grow between 11%-to-13%, between $1.17 trillion-to-$1.19 trillion, a tally which continues to rise and has seen major traction even well before the pandemic over the last more than two years.

While this 2022 forecast falls short of the 14% annual retail sales growth rate seen in 2021, which NRF said marked the highest growth rate in more than 20 years, it noted that the 2022 forecast tops the 10-year, pre-pandemic growth rate of 3.7%.

NRF Chief Economist Jack Kleinhenz observed that the organization’s forecast comes amid 40-year highs for inflation.

“Most households have never experienced anything like this level of inflation, and it is expected to remain elevated well into 2023,” said Kleinhenz. “In addition to inflation, the forces impacting the economy include COVID-19 impacts, international tensions and policy variability.

And he also observed that while a roller coaster ride of incoming data is expected in the coming months, consumer fundamentals remain in place, in the form of healthy household finances, coupled with strong job and wage growth that he said should support solid growth for consumer spending for 2022.

What’s more NRF said that NRF it anticipates strong job and wage growth and declining unemployment, while pegging full-year GDP growth to decrease to around 3.5% in 2022, due to the “surge of inflation and tightening of monetary policy and less fiscal stimulus.”

When taking into account the many challenges consumers and businesses face, this forecast is very strong, especially when taking into account the myriad of challenges shippers, carriers, logistics services providers, and, of course, consumers are still up against. Just because retail sales remain solid, by no means, eradicates the ongoing supply chain challenges, including port congestion, driver availability, labor shortages, the possibility of another Covid outbreak (let’s all hope we are past that!), and, now, the Russia-Ukraine conflict.

Again, uncertainty is everywhere, with the distinct exception of the frenzied pace of consumer spending, which the NRF’s 2022 retail sales forecast makes very clear.