NRF CEO backs 2010 U.S. retail sales view

Matt Shay, President and Chief Executive of the National Retail Federation, appears at the 2010 Reuters Consumer and Retail Summit in New York June 21, 2010.

NEW YORK (Reuters) - U.S. retail sales are on track to rise 2.5 percent this year despite lingering unemployment and economic uncertainty, the head of the nation's premier retail trade group said on Monday.

In January, the National Retail Federation had forecast a 2.5 percent rise for 2010, as the industry comes out of its worst slump in decades. Speaking at the Reuters Consumer and Retail Summit in New York, NRF Chief Executive Matthew Shay affirmed that forecast.

"Based on what we saw in the first four or five months of the year, I think we're right on track," said Shay, who has been in the job for five months. "We feel confident that 2.5 percent is the right number."

"That reflects a market in which there's a high degree of uncertainty and we're going to see things going a little bit sideways from now for the rest of the year," Shay said.

He added that the trade group would have more data to support its forecast following the upcoming back-to-school shopping season.

Retailers' bets on future consumption can often be measured by how much merchandise they order upfront.

In general, Shay said retailers remained "very sensitive" about how much inventory they were willing to take on, in order to avoid a repeat performance from late 2008 and early 2009, when they were forced to offer steep, profit-sapping discounts to move unsold merchandise.

"The big issue for us is what's going on economically with jobs, with housing, with access to credit -- and that obviously impacts consumer confidence levels and consumer spending," Shay said. And to the extent that the European debt crisis affects U.S. equity markets, he said it also impacts U.S. consumer spending.

"I think that it does have a psychological effect, at some level," he said.

(Reporting by Martinne Geller; Editing by Phil Berlowitz and Matthew Lewis)