The National Retail Federation (NRF) shared its forecast on the state of U.S. retail and consumers in 2024. The organization predicted that things would largely continue on the same track as 2023.

“The resiliency of consumers continues to power the American economy, and we are confident there will be moderate but steady growth through the end of the year,” NRF president and CEO Matthew Shay said in a virtual panel on March 20. “Successful retailers offer consumers products and services when, where and how they want to shop with prices they want to pay.”

The group invited industry experts and retail leaders to share more about what they expect to see in 2024. 

NRF’s 2024 forecast

The NRF shared its 2024 forecast that retail sales will grow between 2.5% and 3.5% over 2023. That would put total sales between $5.23 trillion and $5.28 trillion. That’s in comparison to 3.6% annual sales growth in 2023, resulting in sales of $5.1 trillion. 

The organization’s 2024 prediction is in line with the average annual sales growth of the three years before the pandemic, NRF chief economist Jack Kleinhenz said at the event.

The NRF expects nonstore and online sales to grow at a faster rate than overall retail. They are expected to grow between 7% and 9% to $1.47 to $1.50 trillion. Nonstore sales totaled $1.38 trillion in 2023. 

It also said U.S. gross domestic product (GDP) will likely grow by about 2.3% in 2024, a slowdown from 2.5% in 2023. However, that’s still enough growth to sustain job growth, Kleinhenz said. Job growth will be slower than 2023 levels, he said, predicting about 100,000 fewer new jobs per month in 2024.

He added that inflation is expected to moderate as the economy cools. The unemployment rate will likely stay around 4%, he said.

“The economy is primarily supported by consumers who have shown much greater resilience than expected, and it’s hard to be bearish on the consumer,” Kleinhenz said. “The question for 2024 ultimately is, will consumer spending maintain its resilience?”

Consumer preferences 

The NRF invited some retailers to share how consumer preferences are changing in 2024, and how they are meeting those new preferences. 

A preference for convenience is the biggest change, Walmart U.S. CEO and NRF board member John Furner said. He added that he doesn’t see convenience going away as a trend, and the most successful retailers will be those who can fulfill this need.

“People are willing to trade off price for greater convenience,” he said. “Retailers that find ways to reduce friction and save people time will continue to win. ”

Bundle x Joy founder and CEO Jess Berger made a similar point. The pet retailer’s products have to be available wherever a consumer might want to access them, which could be multiple different ways in a single day, she said. She pointed to availability on Amazon’s marketplace, the retailer’s own direct-to-consumer website, and in store to meet consumers where they want to shop. 

January and February results

Consumer confidence has been increasing so far this year, and consumers have spent in January and February, Shay said.

The NRF releases monthly sales figures through a partnership with CNBC Retail Monitor. Total retail sales increased 6.3% year over year in February, the most recent month with available data. Online sales grew 18.08% year over year.

In January, total retail sales grew 2.34% year over year and online sales increased 25.47%, according to Retail Monitor data.

“Health and personal care purchases surged” in both months of the year so far, Shay said. They increased 9.7% year over year in January, and 11.18% in February. Additionally, “consumers weren’t afraid to splurge for special events and self care. They turned out for Valentine’s Day, the Super Bowl, and Easter,” so far, he said.

However, consumers remain somewhat pinched by inflation and are trying to keep purchases practical. They are prioritizing what they need over what they want and minimizing discretionary purchases at a rate 26% higher than in March 2020, Shay said based on NRF data.

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