How exactly will the government shutdown affect retailers?

by Steve Pruitt

Q: I heard that holiday retail sales figures are not coming out this week due to the government shutdown. What other shutdown effects should retailers expect?

Steve Pruitt: First of all, the shutdown is certainly affecting consumer confidence, and the longer it goes on, the more problematic it will become. This is just another chink in the armor of retail growth.

Here are some of the other issues we need to keep our eyes on:

1. The normal slowing of sales trends (after a record years of expansion)

2. Trade disputes

3. Contentious politics

4. A generational change among consumers (the phasing out of the Baby Boomers)

5. The bleeding of sales to vendors selling direct on the Internet

6. And finally, the government shutdown and its effect on both consumer confidence and spending power

Amid all these issues retailers need to stay flexible. Don’t assume you know what works based on the past. We encourage our merchants to try new approaches, and above all, pay close attention to what the sales data is telling them. The market is changing quickly, so look at your data week-to-week. Be ready to adjust and get out of your comfort zone, even if that means trying new vendors and new market segments. Yes, this is a time of challenges, but also of opportunities. Not everyone will be able to adapt quickly – make sure you are one of them.


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