Yahoo Finance Writes: Retailers’ Warning to Congress: You’re Killing Christmas!
In an open letter to congressional leaders, National Retail Federation (NRF) president & CEO Matthew Shay made a persuasive case that without an immediate end to the government impasse the American economy is facing disaster with or without a technical debt default. According to the NRF the recurring nature of the debt ceiling debates have created repeated headwinds for his industry over the last several years, suggesting a temporary bargain is of limited value.
The problem is reaching an apex at the worst possible moment for retailers. Traditionally the holiday season accounts for the bulk of a retailers’ profits. In fact, Black Friday earned the name because most merchants would be in the red (losing money all year) if not for the month between Thanksgiving and Christmas.
In my previous post titled Why I Really Hate Christmas & My Gift To You I have predicted that retailers will have a miserable holiday season. I have also suggested that you should wait till the last moment to buy your Christmas gifts this year. By that point stores will literally be giving stuff away. Today, we are beginning to see a much more clearer evidence of just that.
Retailers now claiming that the Government shutdown is the primary reason for their weak sales. Certainly the government shutdown does have an impact, but not nearly to the extent that most retailers claim. The real culprit the US Economy.
Now running out of steam, the US Economy and the Financial Markets face a certain future. They are heading south, way south. The economy is not nearly as strong as the US Government and the media want us to believe. With high structural unemployment, overwhelming debt and no income growth, the American consumer is tapped out. As I have said before, expect a terrible retail holiday season this year.
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