Retail Trade Group Expects Sales To Fall This Year

New York, NY, Jan.27, 2009--The nation's retailers are in for a rough 2009, according to a sales forecast released Tuesday from the world's largest retail trade organization.

Retailers are expected to record a 0.5 percent drop in revenue in 2009, the first annual decline in three decades and perhaps much longer, according to a National Retail Federation forecast released Tuesday.

That's well below the modest 1.4 percent gain they recorded for 2008.

Massive layoffs, slumping home prices and tight credit are keeping shoppers tightfisted.

The NRF estimated that retail sales for the first half of 2009 will fall 2.5 percent. Then, they'll show a 1.1 percent decline in the third quarter and rebound to a 3.6 percent increase in the fourth quarter, aided by an anticipated government economic stimulus.

Another factor that should help sales figures for late 2009 is that sales were so dismal in the fourth quarter of 2008 -- declining 1.7 percent, according to Rosalind Wells, NRF's chief economist.

For November and December combined, sales fell 2.8 percent, well below the association's forecast of a 2.2 percent gain.

"Most of the consumer behavior we saw in 2008 will continue well into this year," said Wells

She said she's never seen an annual decline in the 30-plus years she has tracked retail sales.

NRF's retail sales figures exclude business from automobile sales, gas stations and restaurants.

One of the key challenges for the retail industry is the massive layoffs across all sectors that appear to be accelerating, Wells said.

"Employment is one of the foremost criteria we look for, which in turns means income," Wells said. "Without a good employment trend, it is very hard to have confident shoppers to go out and spend. Right now, employment numbers have been terrible, and more layoffs are to come."


The reading is expected to be up slightly, at 39, from 38 in December, which marked the lowest point since at least 1967, when the index began.