Retail Sales Growth Expected To Slow In 2012

Victoria's Secret Model Alessandra Ambrosio

[credit provider=”AP”]

Retail sales are expected to climb 3.4% in 2012 to $2.53 trillion, cooling from growth of nearly 5% last year, the National Retail Federation estimates.The NRF attributes the slowing gains to a stalled employment picture and slow job creation.

“Our 2012 forecast is a vote of confidence in the retail industry and our ability to succeed even in a challenging economy,” NRF President and CEO Matthew Shay said. “Retailers have played a key role in driving growth, but to continue this momentum we need Washington to act on proposals that will spur job creation and unleash the power of the private sector.”

Retailers had mostly finished 2011 on a positive note, with TJX, the owner of brands like T.J. Maxx and Home Goods, posting comparable sale gains of 8%. Others saw similar improvements: Costco, up 7%, Macy’s (including its high-end Bloomingdale’s brand) up 6.2%, and Nordstrom up 8.7%.

But the industry started off the new year on unstable footing. While luxury players like Burberry continue to push through growth, other big firms have issued profit warnings. New York & Company, the mid-sized apparel company that has struggled with profitability over the past several quarters, said last week it expected gross margins to erode further.

Over the Martin Luther King Jr. Day holiday weekend, big-box stores including Kohl’s announced near fire sales. Discounts reached up to 80% at the Menomonee Falls, Wisconsin, chain, with ruffle dresses priced at $13.60, from $60.

If the 3.4% growth estimates hold, the sector would outpace economic expansion in the U.S., with economists now forecasting growth slightly above 2%.