Retailers less optimistic about 2015 sales

The National Retail Federation (NRF) on Wednesday lowered its retail sales forecast for the year because of slower-than-expected growth through the first half of 2015.

The NRF, which expects sales to increase steadily through the remainder of the year, lowered its forecast to 3.5 percent from 4.1 percent.

Despite the less optimistic outlook, the NRF still anticipates that the improving housing and labor markets will lead to solid improvements in sales and consumer spending during the second half of the year.

“Despite all of these hurdles, we are optimistic that consumer spending during the second half of the year will benefit from recent improvements in the housing and labor markets along with lower energy costs, and believe consumer confidence will grow enough to bolster retail purchases for the year,” said NRF President and CEO Matthew Shay.

The group attributes most of the struggles for businesses and consumers to Washington’s creation of more rules and regulations.

“Until the government and our elected leaders get serious about enacting policies that lift consumer confidence, create economic growth and spur investment, we will continue this trend of solid, but not exceptional, performance in the economy,” Shay said.

Sales increased at a 2.9 percent pace — weighed down by severe winter weather — during the first half of 2015 but are expected to grow at a faster 3.7 percent rate over the next five months, according to NRF estimates.

The estimates include general retail sales and nonstore sales; they exclude automobiles, gas stations and restaurants.

“A confluence of events, including treacherous weather throughout the United States through most of the winter, issues at the West Coast ports, a stronger U.S. dollar, weak foreign growth and declines in energy sector investments all significantly and negatively impacted retail sales so far this year, and thus have changed how future sales will shape up for the rest of 2015,” said Jack Kleinhenz, NRF’s chief economist.

The change aligns with the National Association for Business Economics (NABE) July survey showing that stronger growth is expected through the final half of the year despite slower sales expectations.

“The survey results show a majority of panelists expect solid growth for the remainder of 2015,” said NABE President John Silvia, chief economist at Wells Fargo.

“Respondents are marginally less bullish than they were in previous surveys,” he said.

A majority of survey panelists, 59 percent, expects sales to increase during the July–September quarter, but that is a decline from the 71 percent in April that expected second-quarter sales to grow.