The current shutdown marks the first time in 17 years that the government has come to a halt, as both political parties remain at a standstill. With no sort of compromise in sight, a chain reaction with numerous consequences could follow. Currently, one of the main concerns is the increase in number of furloughed government workers who are grouped into two categories: essential and nonessential jobs. However, if the shutdown continues, retailers of public businesses may also take a hit creating potential conflict during the holiday season.
As the upcoming holiday season quickly approaches, retailers are actively predicting whether or not the federal government shutdown will impact sales. According to The National Retail Federation, sales are expected to increase 3.9 percent for November and December. However, these calculations were based on past holiday sales that had no interference of a government shutdown. Depending on how long the shutdown lasts, retailers may have to alter their marketing strategies to maintain their predicted sales for the holidays.
As the government shutdown enters its second week, no substantial progress has been made to give retailers an accurate sense as to what will come in the next few months. Some sources believe that the shutdown could not be more perfectly timed because, “…the back-to-school rush has quieted, and despite the best efforts of some retailers, the holiday shopping season is still many weeks away from being in full swing.” On the other hand, “…some marketers may find that because consumers are spending less money, their holiday marketing may need to be tweaked at the last minute this year.” These two outlooks lead us to wonder if a rippling effect will take place. NBC News has created possible scenarios that would occur if the shutdown lasted for over a month. One possible scenario on November 17th, according to The National Retail Federation, would indicate the “make-or-break” of the holiday shopping season. Consumer confidence in retailers will diminish as the shutdown continues, which will create devastating effects for retail stores and the overall economy.
With Halloween quickly approaching, it will be interesting to see how the government shutdown could impact sales in terms of consumer behavior. Do you think that the shutdown will have an effect on holiday spending? How will retailers respond if the shutdown looms on in terms of marketing strategies?
– Aaron Love, Kara Zimmerman, Rachel Clay, Rebecca Hobbs
IMC Hawks Blog 