Optimistic Outlook for 2014 Retail Sales

The NRF does not count automobile sales or sales at gasoline stations and restaurants in its forecast. The NRF’s president said:

Measured improvements in economic growth combined with positive expectations for continued consumer spending will put the retail industry in a relatively good place in 2014. Though headwinds in the form of the looming debt ceiling debates, increased health care costs, and regulatory concerns still pose risks for both consumers and retailers, we are cautiously optimistic and hopeful that the economic tides will change in 2014.

The NRF based its sales forecast on a rise in real U.S. GDP of 2.6% to 3% in 2014 and a falling unemployment rate that could reach 6.5% or lower by the end of this year. Inflation is predicted to rise to 1.7% and the federation expects continuing improvement in the housing sector.

In a presentation entitled “What’s Ahead for Retailers in 2014” on the NRF website, one of the slides makes a pretty bold claim:

Pricing is about to get more daunting, especially if you do business online. Look for ‘name your own price’ tools to become popular.

The NRF may be right about that, but aside from Priceline.com Inc. (NASDAQ: PCLN), that has not been a wildly successful business model. On the plus side, a “pay what you want” price indicates to the retailer that the customer does want to pay for something and it’s just a matter of setting the right price. Conversion rates are high on this type of sale and traffic increases can be significant.