clear
Tuesday June 30th, 2015 6:06AM

Season of uncertainty for stores

By The Associated Press
NEW YORK (AP) -- Will Washington be the Grinch who stole Christmas?

After weeks of bickering between Congress and the White House, President Barack Obama on Wednesday signed into law a plan that ended a partial 16-day government shutdown and raised the nation's debt limit until early next year.

But the measure, which comes a couple 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're fearful that it will.

"I am not nervous, but I am mindful," said Jay Stein, chairman of Stein Mart, a 300-store chain that sells name-brand home goods and clothing at discounts of up to 60 percent. "The biggest enemy of consumer confidence is uncertainty."

Indeed, retailers and industry watchers say Washington gridlock already has caused some shoppers to hold back on purchases.

Men's clothier Jos. A. Bank Clothiers and furniture chain Ethan Allen have noted that 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 N. Wildrick, chairman of Jos. A. Bank Clothiers, which has 623 stores nationwide, said retailers can't afford more uncertainty during the holiday shopping season, which is six days shorter than a year ago. "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 yet translated into sustained spending increases among shoppers.

But retailers spend money on advertising, order additional inventory and add sales staff during the holiday season in hopes that shoppers will spending freely. If shoppers don't, stores may have to discount heavily, which eats away 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.-based 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, he said.

"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."

Take Nino Rodriguez, who was already planning to cut back spending on gifts for his four children ages 3 to 21 by about 25 percent to $1,500 as he juggles stagnant wage gains with college tuition costs.

Now, the Chicago resident plans to cut another $500 from the holiday budget because of uncertainty. In particular, he's concerned about having government aid checks suspended for his 19-year-old and 13-year-old sons who have special needs.

"The doomsday clock is just one second less than what it was before," said Rodriguez, who works in the hospitality business. "All this just heightens our awareness of spending."

This isn't the first time that debt-and-spending stalemates have hurt shoppers' mood during the holidays. Last year, many Americans worried about tense negotiations in Washington to resolve the fiscal cliff, a simultaneous increase in tax rates and a decrease in government spending.

Congress and the White House reached a deal on Jan. 1 that prevented income taxes from rising for most households, but many store executives blamed the uncertainty for a slowdown in sales in December. In November 2012, sales were up 4.7 over the year ago period, but were up only 2.4 percent in December.

And in August 2011 when there was market turmoil and political strife over raising the federal debt ceiling, consumer sentiment fell to a 31-year low, according to the Thomas Reuters/University of Michigan survey.

Jeff Landis of Chicago-based Montopoli Custom Clothiers recalls those days when business was quiet and he had to delay ordering fabric and call his wealthy customers. He said he's seeing the same scenario play out now.

"This is a buzz kill," he said.
© Copyright 2015 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
S&P 500 index has its best year since 1997
The stock market closed out a record year with more all-time highs on Tuesday, giving U.S. indexes their biggest annual gains in almost two decades.
6:56PM ( 1 year ago )
Colorado readies for 'Green Wednesday' pot sales
Police were adding extra patrols around pot shops in eight Colorado towns that plan to allow recreational sales to anyone over 21 on Jan. 1.
1:52PM ( 1 year ago )
Kerry seeks framework for Mideast peace talks
A senior State Department official says Secretary of State John Kerry will try this week to get Israel and the Palestinians to agree on a framework for negotiating a final peace agreement, yet cautions against raising expectations for Kerry's latest round of shuttle diplomacy.
1:35PM ( 1 year ago )
U.S. News
Missing Ga. bank director arrested in Brunswick
A bank director accused of losing millions of investors' dollars before vanishing last year was arrested Tuesday during a traffic stop in a city in south Georgia.
7:00PM ( 1 year ago )
Amtrak to suspend some Crescent service in Jan., Feb.
Amtrak service will shut down in parts of the Southeast for several days in January and February for rail maintenance by Norfolk Southern Railway.
9:00AM ( 1 year ago )
Lung cancer scans urged for some smokers, not all
Certain current or former heavy smokers should start getting yearly scans for lung cancer to cut their risk of death from the nation's top cancer killer, government advisers said Monday - even as they stressed that the tests aren't for everyone.
7:26AM ( 1 year ago )
Business News
Sex offender held in Hall County for failing to register
A 47-year-old man was booked into the Hall County Jail Tuesday, being held without bond for allegedly failing to register as a sex offender, his second such arrest.
6:09PM ( 1 year ago )
Pharmacy robberies may involve same suspect
Oakwood Police Tuesday afternoon released details in a pharmacy robbery they're investigating, similar to one that happened in the Hall County Tuesday morning.
5:46PM ( 1 year ago )
Victim critical following apartment fire
A 41-year-old woman was in critical but stable condition Tuesday after being rescued from an apartment fire in Forsyth County late Monday afternoon.
3:16PM ( 1 year ago )
Local/State News
Feeling US snub, Saudis strengthen ties elsewhere
Increasingly vocal in its frustration over U.S. policies in the Mideast, Saudi Arabia is strengthening ties elsewhere, seeking out an alignment that will bolster its position after it was pushed to the sidelines this year.
4:34PM ( 1 year ago )
NSA reportedly intercepts computer deliveries
A German magazine has lifted the lid on the operations of the National Security Agency's hacker unit, revealing how American spies intercepted computer deliveries, exploited hardware vulnerabilities, and even hijacked Microsoft's bug report system to spy on their targets.
12:31PM ( 1 year ago )
Rockets fired from Lebanon into Israel
Rockets from Lebanon struck northern Israel on Sunday, causing no injuries but sparking an Israeli reprisal shelling in a rare flare-up between the two countries.
12:26PM ( 1 year ago )
Politics
Obama proposal would make 5 million more eligible for OT
WASHINGTON (AP) — Salaried workers who earn nearly $1,000 per week would become eligible for overtime pay under a proposal President Barack Obama unveiled Monday, lamenting that too many Americans are...
11:07PM ( 6 hours ago )
2nd escaped murderer is shot, captured after other killed
MALONE, N.Y. (AP) — A three-week manhunt that began when two convicted murderers staged a brazen prison break involving stolen power tools and hacksaw blades hidden in frozen hamburger meat ended Sund...
11:43PM ( 1 day ago )
SpaceX rocket destroyed on way to space station, cargo lost
An unmanned SpaceX rocket carrying supplies to the International Space Station broke apart Sunday shortly after liftoff. It was a severe blow to NASA, the third cargo mission to fail in eight months.T...
5:28PM ( 1 day ago )
Conservative churches confront new reality on gay marriage
At First Baptist Dallas, where the pulpit was adorned Sunday with red, white and blue bunting to honor the Fourth of July, the pastor called the Supreme Court's gay marriage ruling "an affront in the...
4:25PM ( 1 day ago )
Hearse carrying body stolen in downtown Atlanta
ATLANTA (AP) — Atlanta police say a hearse with a body inside was stolen outside a hospital but both were recovered a short time later.
4:06PM ( 1 day ago )