Retail Federation Predicts Slowing Sales This Year

Washington, DC, January 14, 2008--The National Retail Federation said sales in 2008 will see their worst pace of growth in six years as consumers grapple with an uncertain economy.

The NRF said in its annual economic outlook that sales this year will grow 3.5 percent, the slowest increase since 2002 when sales grew 3 percent.

"Consumers will be under financial stress from high energy costs, the fallout from the housing slump, and sluggish employment and income growth," said NRF chief economist Rosalind Wells.

"Shoppers will seek to pay down debt, spend more in line with income growth, and approach discretionary purchases with more restraint," she said.

In addition, Wells said constant talk about a possible recession also affects consumer sentiment.

"It makes consumers nervous. Recession isn't a sure thing but we know that they're already feeling the slow growth in the economy," she said.

All retailers, from luxury to online sellers, will be pressured this year, NRF said.

NRF expects a sales pickup in the second half of the year due to interest rate cuts and an election year fiscal stimulus package.