NRF: U.S. retail sales are expected to reach $5.23 trillion in 2023, up 4-6% year-on-year

The National Retail Federation released its annual forecast, predicting retail sales will grow 4% to 6% in 2023. Overall, the NRF expects retail sales to reach $5.13 trillion to $5.23 trillion this year.

“In the past three years alone, the retail industry has experienced growth that would normally take nearly a decade to achieve. We expect growth to slow in the coming year,” said Matthew Shay, NRF president and CEO. “Retailers are well positioned to serve consumers in the current economic environment by offering a range of products at affordable prices and providing an excellent shopping experience.”

U.S. retail sales are forecast to grow 7% to $4.9 trillion in 2022. The 2023 forecast is higher than the pre-pandemic average annual retail sales growth rate of 3.6%.

Online sales are expected to grow 10% to 12% year-over-year to $1.41 trillion to $1.43 trillion. While many consumers continue to take advantage of the convenience offered by online shopping, much of this growth is driven by multichannel sales, with physical stores still playing an important role in the fulfillment process. While the role of physical stores has evolved in recent years, they remain the primary shopping location for consumers, accounting for approximately 70% of total retail sales.

NRF expects full-year GDP growth of about 1%, reflecting a slower pace of economic growth and half the 2.1% growth rate seen from 2022. Inflation is falling, but will remain between 3% and 3.5% for all goods and services this year.

While the labor market remains resilient, the trade group expects job growth to slow in the coming months as economic activity slows. The unemployment rate is likely to exceed 4% before next year.