Uncle Sam has been spared. Now Santa Claus is in trouble.
Washington signed a bill this week to avert the debt crisis, but retailers fret that the fiscal chaos may have rattled shoppers heading into the crucial holiday season.
A bill signed into law by President Obama ended a 16-day government shutdown and suspended the nation’s debt limit until early next year. But the stopgap measure leaves the threat that bickering and gridlock could return in the coming months.
That’s terrible timing for retailers, many of which rake in as much as 40 percent of their annual sales during the holidays.
“The more this nonsense goes on … the more scared [shoppers] become,” Bob Wildrick, chairman of men’s suit retailer Jos. A. Bank, told the Associated Press.
Consumers already are clamping down, industry watchers say. Nationwide store traffic last week dropped 7.1 percent from a year ago and 7.5 percent from a week earlier, according to ShopperTrak, an industry consulting firm.
Even before the debt standoff, retailers were cautious. While the job and housing picture is improving, that hasn’t yet translated into sustained spending increases among shoppers.
The National Retail Federation, the nation’s largest retail group, had forecast in October that sales would climb 3.9 percent in November and December to $602.12 billion, higher than last year’s 3.5 percent gain. But the forecast didn’t account for the prolonged shutdown.