Will Washington be the Grinch who stole Christmas?After weeks of bickering between Congress and the White House, President Barack Obama signed into law Wednesday a plan that ended a 16-day government shutdown and suspended the nation’s debt limit until early next year.But the measure, just weeks ahead of the holiday shopping season, only temporarily averts a potential default on U.S. debt that could send the nation into a recession. Retailers hope that short-term uncertainty won’t stop Americans from spending during the busiest shopping period of the year, but they fear that it will. “I am not nervous, but I am mindful,” said Jay Stein, chairman of Stein Mart, a 300-store chain that sells home goods and clothing. “The biggest enemy of consumer confidence is uncertainty.” Retailers and industry watchers say Washington gridlock has already caused shoppers to hold back. Compared with a year ago, the number of people going to stores nationwide dropped 7.5 percent for the week that ended Oct. 5 and 7.1 percent during the next week, according to ShopperTrak, which measures foot traffic at 40,000 retail outlets. Men’s clothier Jos. A. Bank and furniture chain Ethan Allen said their customers cut back in recent weeks. And auto sales, which had been strong, trailed off last week, with experts blaming Washington lawmakers. Retailers say the agreement that lawmakers approved, which funds the government until Jan. 15 and gives the Treasury the ability to borrow above its limit until Feb. 7, may not be enough to alleviate shoppers’ concerns. Robert Wildrick, chairman of Jos. A. Bank, which has 623 U.S. stores, said retailers can’t afford more uncertainty during the holiday shopping season. “The more this nonsense goes on … the more scared [consumers] become,” he said. Even before the stalemate in Washington, retailers had reasons to be cautiously optimistic about the holiday season, which accounts for up to 40 percent of retailers’ annual revenue. While the job and housing markets are improving, that hasn’t translated into sustained spending increases. But retailers spend money on ads, order additional inventory and add sales staff during the holidays, hoping shoppers will spend freely. If they don’t, stores have to discount, which eats into profits. The National Retail Federation, the nation’s largest retail group, had forecast in early 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. Jack Kleinhenz, chief economist for the Washington, D.C., group, told The Associated Press that he may lower the projection after he sifts through retail sales and jobs data, reports that had been delayed because of the shutdown. The uncertainty could hurt sales. “It’s like having an ongoing fever that you would like to shake but just doesn’t go away,” Kleinhenz said. “That causes a backup in decision-making from consumers and businesses.”
J.C. Penney to open on Thanksgiving
J.C. Penney will open on Thanksgiving evening to kick off the holiday shopping season as the beleaguered retailer hopes to get back in the game for the crucial selling period.
The Plano-based chain will open most of its 1,100 stores at 8 p.m. on the holiday, the same as rival Macy’s, and will be open 25 hours straight, closing at 9 p.m. the next day.
The Thanksgiving evening opening is much earlier than last year, when Penney didn’t open until 6 a.m. Friday. That made the retailer one of the laggards for the unofficial kickoff to the season.
Penney is also bringing back a tradition it ditched last year: It will give away nearly 2 million holiday snow globes starting at 4 a.m. on the Friday after the turkey feast.
— The Associated Press