Cited: MSNBC
2011 wasn’t a banner year for the nation’s retailers, but it wasn’t terrible either. And that’s a good thing because 2012 will look pretty much the same. There’s a chance that sales will be stronger in 2012 but a lot will depend on the job market, which still remains the fly in the ointment for so many sectors of the economy. Shoppers were spending in 2011 at a moderate pace until the holiday season, at which time they seemed to be more willing to buy as long as the sellers were willing to offer deep discounts long into the season, not just on Black Friday. Industry analysts find that consumers are doing a good job consuming considering that so many of them are either unemployed or underemployed and that nowhere are there signs of a deflationary spiral lower where shoppers are putting off purchases entirely.
The National Retail Federation expects that retail sales in the U.S. will grow by 3.4% in 2012, which would be slightly lower than the 4.7% rise seen in 2011. However, it should be noted that the sales increase in 2011 followed on the back of two horrendous years in 2009 and 2010. Other industry watchers, such as ShopperTrak, are expecting sales to grow at the same pace as 2011 based on surveys that they have conducted nationwide. Custom Growth Partners, another retail market watcher, expects even better sales data for 2012 with their projections coming in at 5% – 6% growth for 2012.
E-commerce sales are also expected to increase, though to some extent, this could sap momentum from actual store sales as consumers shift to buying more products online. Analysts expect e-commerce sales to rise by more than 15% in 2012. Still the biggest factor underlying virtually every area of economic growth is the job market. The data for December were encouraging with the overall unemployment rate falling to 8.5% while new jobs created for the month increased by 200,000. U.S. retailers would certainly like to see this trend continue so that some of the more rosy predictions for retail sales actually come true.
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My take:
There’s no way to underestimate the value of the consumer in the U.S. economy so seeing that sales picked-up in 2011 and that they are expected to grow at the same pace or perhaps better gives some hope that the economy will pick up steam also. But as noted above, the wild card will be the jobs market and how quickly we can get more people back working. Then we’ll see spending increase to levels where there aren’t closed retailers lining strip malls across the country.
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