Shutdown could hurt consumer confidence -- Gazette.Net


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The fourth quarter is traditionally the retail industry’s time to shine, with consumer confidence a key part of getting smartphones and iPad minis to fly out of stores to under people’s Christmas trees.

But the federal government shutdown comes at one of the worst times for retailers just as they prepare for the holiday shopping season, the busiest time of the year for most stores. November and December can account for as much as 40 percent of a store’s annual sales.

“We think we can weather this if [the shutdown] gets resolved quickly,” said Matthew Shay, president of the National Retail Federation, this week in a conference call. “But obviously, we are very concerned that if this drags on for an extended period of time, it’s going to affect consumer confidence and it’s got implications for the entire rest of the holiday shopping season.”

At the Montgomery Village Center Spirit store, sales have not slowed this week since the shutdown started early Tuesday, said Joe Korgash, a manager at the seasonal retailer that focuses on costumes and accessories for Halloween. The store has been in that Gaithersburg location since late August and closes a few days after Halloween.

“We have continued to be busy,” Korgash said Thursday. “I haven’t seen any change in customer traffic this week.”

The retail federation expects holiday sales nationwide to increase by almost 4 percent to $602.1 billion over last year.

“Overall, retailers are optimistic for the 2013 holiday season, hoping political debates over government spending and the debt ceiling do not erase any economic progress we’ve already made,” Shay said.

Online sales during November and December are expected to grow between 13 percent and 15 percent over last holiday season to as much as $82 billion, according to Shop.org. Last year’s online sales during the fourth quarter rose 15.5 percent over 2011’s fourth quarter.

This year’s season will welcome several new stores that weren’t around a year ago. Costco opened in Wheaton in April, while Wegmans and some smaller retailers near it debuted last month in Germantown.

Crown, a multi-use development under construction in Gaithersburg near the Washingtonian Center, has opened a Starbucks and will have other retailers open in a few months, including a Harris Teeter grocery store. The community broke ground about a year ago and has “dozens” of sales of units, said Kristine Warner, a spokeswoman for Crown.

“Crown is really taking shape,” Warner said.

Retail employment in Montgomery and Frederick counties rose by 1,700 jobs between August and August 2012, according to the latest federal labor figures.

Wal-Mart and Kohl’s — two of the largest retail employers in Montgomery and Frederick — plan to hire about the same number of seasonal employees as last year. Another large area retailer, Target, plans to hire about 20 percent less, as officials said they want to let permanent workers get more hours and respond better to changes during the holiday season.



kshay@gazette.net