For 2016, the National Retail Federation is predicting a 3.1 percent increase in retail sales, excluding automobiles, gas stations and restaurants.
While this might not seem like much, it is higher than the 10-year average of 2.7 percent. The NRF reports that prospects for consumer spending are straightforward — more jobs equal more income and, therefore, more spending. The organization expects unemployment to drop to 4.6 percent by year’s end and said increased spending will come largely from growth in jobs, rather than wage increases.
“Wage stagnation is easing, jobs are being created, and consumer confidence remains steady,” said Matthew Shay, NRF president/CEO, in a press release. “So despite the headwinds our economy faces from international developments — particularly in China — we think 2016 will be favorable for growth in the retail industry.”
Lower gas prices also deserve some credit for the positive outlook. Handing over less money at the pump leaves more discretionary income for consumers to save, pay down debt and spend on travel, eating out and personal services, said NRF chief economist Jack Kleinhenz.
The NRF’s predictions apply to the retail industry as a whole and are not broken down by size, industry or region. So it leaves certain questions open for the pool and spa industry. Some aren’t sure they’ll see the full benefits of this 3.1 percent increase in the coming year.
“We are such a weather-dependent industry that I think it’s hard to attach ourselves to these kinds of forecasts,” said Chris Callanan, owner of North Shore Pool & Spa in Wakefield, Mass. “It’s a bit early for us to get a feel for the year here in New England, and our company is coming off a great year. But so far numbers are on par with last year.”
But in some cases the future looks brighter than a mere 3.1 percent bump. “We saw overall growth of slightly over 5 percent in 2015, [and] we are forecasting similar growth for 2016,” said Brian Quint, president of Aqua Quip in Seattle.
He saw increased sales of chemicals, accessories and repairs to existing pools, thanks to a very warm summer in the Seattle area. Upper single-digit growth also was experienced in hot tub and grill categories, which Quint attributes to a healthy local economy and good marketing.
“In addition to these same categories being up in 2016, we are also expecting to see some modest growth in the hearth/fireplace products business in 2016,” Quint said. “The forecast growth in hearth [sales] is based upon what we hope and expect to be a cooler, wetter fall and winter season.”
A mild winter in Wilmington, Ill., is bringing on predictions of higher chemical sales at DesRochers Backyard Pools. “Since the weather has been warmer earlier, bacteria starts to grow in pools sooner ... making pools [into] swamps when they do open for the summer,” said Brooke Rossi, retail general manager. “Our chlorine sales usually reflect this.”
Consumers also are showing more than normal interest in hot tubs, which she also attributes to the weather.