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Record retail sales growth could take place in 2021 if the economy recovers from the pandemic

Record retail sales growth could take place in 2021 if the economy recovers from the pandemic

Record retail sales growth could take place in 2021 if coronavirus gets under control

Shops in downtown Valparaiso are shown. Record retail sales growth could take place this year, the National Retail Federation forecasts.

Despite the coronavirus pandemic, retail sales — including online sales — grew by a record 6.7% last year, surpassing the previous growth rate record of 6.3% in 2004.

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2021 could see a potential record increase in retail sales growth so long as the coronavirus gets under control and the economy recovers.

The National Retail Federation forecasts retail sales nationally will grow by 6.5% to 8.2% to $4.33 trillion and $4.4 trillion this year. 

“There is no doubt the economy is positioned for growth in 2021, but how much growth comes down to a single non-economic force — the coronavirus,” National Retail Federation Chief Economist Jack Kleinhenz said. “I am optimistic about improving macroeconomic conditions as COVID-19 infections decline and distribution of vaccines becomes more widespread. Yet the road is never straight, and we have challenges ahead. The pandemic remains the largest uncertainty and the biggest risk the economy faces in 2021.”

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Strong savings, high stock values, rising home prices, low interest rates and government stimulus leave consumers with purchasing power. That, coupled with pent-up demand while people were cooped up more at home during the pandemic, should accelerate growth in consumer spending, Kleinhenz said.

Online retailers may see some of the biggest gains. E-commerce increased by 21.9% last year, and is expected to grow between 18% to 23% to as much as $1.19 trillion.

COVID restriction also shifted spending to goods instead of the services that normally make up 70% of consumer spending. Kleinhenz predicts more people will spend more money on travel, dining out and entertainment as soon as allowed to do so. 

He's predicting more of a “return to normalcy” starting in the second quarter.


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Business Reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.

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