(Reuters) - U.S. retail sales could rise as much as 8.2% to more than $4.33 trillion this year as more people get the COVID-19 vaccine and the economy reopens, the National Retail Federation (NRF) said on Wednesday.
The economy is expected to see its fastest growth in over two decades as the rollout of the vaccine to consumers should permit accelerated growth during the mid-year, the trade group said. NRF expects the overall economy to gain between 220,000 and 300,000 jobs per month in 2021.
"We are very optimistic that healthy consumer fundamentals, pent-up demand and widespread distribution of the vaccine will generate increased economic growth, retail sales and consumer spending," NRF Chief Executive Matthew Shay said in a statement.(bit.ly/3kiGzRI)
Preliminary results show retail sales for 2020 grew 6.7% to $4.06 trillion, above the trade body’s forecast of at least 3.5% growth, NRF said. The retail sales numbers exclude automobile dealers, gasoline stations and restaurants.
U.S. retail sales are expected to rise between 6.5% and 8.2% in 2021, the NRF said.
Deemed “essential, Walmart and rivals Target and Best Buy were permitted to stay open throughout the pandemic, unlike others, including Macy’s.
The U.S. department store chain said while reporting company earnings on Tuesday that it has invested tremendously in its online business, as virus-wary shoppers have opted to stay home to make their purchases rather than leisurely shop in-store.
“We do anticipate that customers will be increasingly more comfortable in public spaces as vaccine distribution reaches scale,” said Macy’s Chief Financial Officer Adrian Mitchell.
New rounds of stimulus-driven consumer spending in the coming months would also strengthen retail sales, should the U.S. Congress pass the Biden administration’s support plan that includes sending a $1,400 check to households.
The NRF also said online sales, which are included in the overall number for 2021, were expected to increase between 18% and 23% to between $1.14 trillion and $1.19 trillion. In 2020, online and other non-store sales jumped 21.9 percent to $969.4 billion as consumers opted to stay home and place their orders online to curb the spread of the virus.
The trade body’s forecast follows other estimates from companies like consumer research firm Customer Growth Partners (CGP).
Boosted by rounds of stimulus checks and a “new-found momentum across income levels,” CGP said earlier this month that retail sales in 2021 will total a record $4.26 trillion, up 8.1% from $3.94 trillion in 2020.
Reporting by Aditi Sebastian in Bengaluru and Melissa Fares in New York; Editing by Shailesh Kuber, Jonathan Oatis, Ben Klayman and Aurora Ellis
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