Will The Government Shutdown Affect Holiday Retail?

By Justina Huddleston
October 2013

With the government shutdown already lasting longer than anticipated, some are now speculating that the repercussions could well travel into the retail sector.

Citing a drop in consumer confidence, proximity to the holiday season, and the thought that economic uncertainty could lead to a more price-conscious consumer, an article on Huffington Post is predicting that we will see a decline in holiday retail sales in 2013 due to the shutdown.

The author points out that the Dow Jones, S & P 500 and NASDAQ have all experienced losses over the past 8 days of government shutdown. He also shows a past correlation between shaky stocks, government insecurity, and a drop in the Consumer Confidence Index.

In spite of all this some outlets remain optimistic. The NRF is still forecasting a 3.9% increase in sales this holiday season, and recently predicted a 9.1% growth of retail container imports in October. However, they remind the reader that import numbers "reflect merchandise ordered months before the shutdown as retailers planned for the holiday season."