Retail Forward Predicts Flat Retail Sales

Columbus, OH, March 19, 2009—In the wake of the worst holiday in at least 40 years, market research firm Retail Forward forecasts continued flat sales or contraction across most retail channels through most of 2009.

On an annualized basis, the forecast translates into core retail sales, excluding autos and gasoline, that are expected to end up flat in 2009 compared with 1.8% growth in 2008.

The only growth will be in the food, drug and mass channels, which are expected to grow at about half their rate of 2008.  Assuming the right conditions emerge, the fourth quarter of 2009 should begin to show signs of improvement, helped by weak prior-year comparisons. 

“The seeds of a turnaround might sprout before the end of 2009 but that depends on whether the environment proves favorable—the government’s next steps must prove effective, consumers must become more positive about the future, job losses must ebb and housing-related measures must stabilize,” comments Frank Badillo, senior economist with Retail Forward.

In an all-out effort to lure scarce shoppers, 2009 will be a very promotional environment, Retail Forward predicts.