Dive Brief:
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Retail sales will continue to slow this year as households shift their spending priorities, according to the National Retail Federation’s 2015 retail sales forecast.
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Sales will grow 3.5%, down from the group’s initial forecast of 4.1%, due in part to the hit from severe winter weather and the West Coast port slowdowns that hurt retailers in the first half of the year.
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Back-to-school sales will be down significantly, the group says, with families spending $630 on average this year, compared to $669 last year. Still, the second half of the year will be better than the first, according to the report.
Dive Insight:
This report doesn’t dwell on the holiday season, and we’ll be getting to that soon enough. But while American households spent on back-to-school last year because they were finally better able to get their kids new computers and other things they couldn’t afford during the worst of the recession and stalled-recovery years, now those things are already in kids’ backpacks. To add to retailers' woes, Americans apparently have better things to spend their money on, according to research from the NRF.
"It's a little bit like deja vu all over again. We did that last summer," federation president and CEO Matthew Shay told CNBC's "Squawk Box."
The group says it continues to advocate for spending on infrastructure and tax reform and against recent efforts to hike the minimum wage and overtime pay. But the wage gap is widely seen as contributing to last year’s “retail funk,” and better pay could ultimately help retailers.