Retailers Lament Government Shutdown

Retailers Lament Government Shutdown
President Obama

Retailers in areas most affected by the government shutdown said the true effects of the furloughs remain to be seen. However, lost sales are almost a certainty.

Gary Weiner, owner of the Saxon Shoes stores in Richmond and Fredricksburg, Va., said his stores have already felt an impact from the shutdown.

“There’s a large government population [here],” Weiner said. “We saw traffic drop off on Tuesday and even more so [on Wednesday]. We believe this indecision is in the back of everybody’s minds and it’s creating hesitation for people [when] spending money.”

And that means lost sales, no matter when the shutdown ends, he added. “No one will recover 100 percent of their lost dollars,” Weiner said.

Speaking on the shutdown’s second day, Neil Stern, owner and president of the Casual Adventure outdoor store in Arlington, Va., said, “Traffic is light already because people aren’t going to work.”

Fewer consumers — and government orders that are now on hold — could force him to take action, he noted. “We might push out some orders or revise them down. We have to keep an eye out,” Stern said.

But not all stores have seen a negative impact.

Maurice Breton, president and founder of the 21 Washington, D.C.-area Comfort One stores, said that so far, if anything, the shutdown has been a positive.

“ I have received our sales for yesterday (the first day of the shutdown), and they were spectacular, a huge increase,” he said. “I think [the furlough is] being used as shopping time for our government employees. It was a record-breaking day.”

Breton recalled that the government shutdown in November 1995 provided a similar boost to sales, but that the second one, from Dec. 16 to Jan. 6, 1996, hurt business. This time, with the debt ceiling expiring on Oct. 17, there is the potential for further upheaval.

“The debt ceiling is coming down the road very quickly, and that is quite frankly much more serious,” he said. “It’s top-of-mind in our town, but we also become somewhat numb to it. [Overall], it’s about consumer confidence, and that’s what this hurts. When consumer confidence is strong, our sales are strong. And when it’s not, we see the effect.”

Matt Priest, president of the Washington, D.C.-based Footwear Distributors & Retailers of America association, said the uncertainty about whether workers on furlough will receive back pay will hurt sales.

“800,000 consumers are out of work, and whether Congress retroactively funds those wages is up for debate,” he said. “We’ve already seen a bit of a flat year, so this can’t have a positive impact on consumer buying power and consumer confidence.”

But some retailers maintained that only time will tell.

Richard Roarabaugh, manager of the Fleet Feet Sports store in Decatur, Ga. — located near the Centers for Disease Control, which has furloughed two-thirds of its 9,000 Atlanta-based employees — said the store was busy Monday night, but the coming weekend will reveal how serious things could be.

“We had a great Monday, but yesterday was slow, and the real tell-tale sign will be what our numbers look like for the weekend,” he said. “I’m not concerned yet, but it’s going to have an effect, and the longer it goes on, the worse it will be.”