Organization advocating for series of sales-tax holidays in '09

Washington--Retail industry sales, excluding automobiles, gas stations and restaurants, are expected to decrease 0.5 percent compared with 2008, as consumers continue to shift their spending priorities, according to the National Retail Federation's (NRF) 2008 economic forecast, released on Tuesday.

"Most of the consumer behavior we saw in 2008 will continue well into this year," NRF Chief Economist Rosalind Wells said in a media release issued this morning. "Shoppers will be seeking value and trading down to discount and off-price retailers in order to stretch their purchasing power."

In a media briefing held on Tuesday afternoon, Wells said luxury goods will suffer alongside all other segments of the retail market in 2009, with only moderate recovery expected in the second half of the year.

"I don't think I would forecast luxury goods sales to be very good this year," she said. "Everyone is being hurt by this recession, the people who shopped in luxury goods stores as well as everybody else."

According to the NRF, retail sales for the first half of 2009 are expected to decrease 2.5 percent. There will be some improvement in the third quarter, with sales decreasing 1.1 percent. And in the fourth quarter, sales are expected to increase 3.6 percent due to comparisons with the same period in 2008 as well as a strengthening economy.

To help the recovery along, NRF Vice President and Tax Counsel Rochelle Bernstein said in the media briefing that they are advocating for the inclusion of three 10-day sales-tax holidays in the current economic-stimulus package Congress is preparing.

Although she acknowledges the sales-tax holidays alone are not going to provide any long-term solutions to the nation's economic woes, Bernstein said a break from sales tax would provide "a spur to consumer spending and help the economy in the short term."

If included and passed as part of the economic-stimulus package, the 10-day tax-free shopping periods would take place in March, July and October.

The NRF is the largest retail trade association in the world, with members including department, discount, drug, grocery, independent and specialty stores, catalog merchants, chain restaurants and e-tailers, as well as the industry's key trading partners of retail goods and services.

For more information about the NRF, visit its Web site, NRF.com.