January 29, 2009, 12:00 AM

The battle for consumer dollars will remain tough into 2009, the NRF says

The National Retail Federation is predicting a 0.5% decline in retail sales in 2009 from 2008, with the biggest challenge in the first half, when it is expecting a 2.5% sales drop.

Katie Evans

Managing Editor, International Research

The retail world will remain challenging in the year ahead, but a slight recovery in the fourth quarter is possible if the federal government’s economic stimulus package is successful, predicts the National Retail Federation, a retailer trade association.

For the year, the NRF is projecting a 0.5% sales decline (excluding automobiles, gasoline stations and restaurants) from last year, with the biggest challenge in the first half, when the NRF is predicting a 2.5% sales decline vs. a year ago.“There will be some improvement in the third quarter with sales decreasing 1.1% . In the fourth quarter, sales are expected to improve 3.6% due to easy comparisons to last year as well as a strengthening economy,” says NRF chief economist Rosalind Wells. “Shoppers will be seeking value and trading down to discount and off-price retailers in order to stretch their purchasing power.”

Wells’ expectations of a strengthening economy in the second half are based on the adoption of an effective federal government stimulus package. “The forecast assumes a swift and substantial economic recovery package,” Wells tells InternetRetailer.com. “If that does not occur, the recovery could be delayed.”

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