New York—“The epicenter of stupidity”…that’s how outspoken L Brands chairman Leslie Wexner referred to Washington, specifically Capitol Hill, this week during the nerve-wracking hours leading up to a temporary debt ceiling solution.
Like many retailers and business leaders, Wexner is concerned about how the political gridlock and its subsequent effects on the economy might impact shoppers on the eve of the holiday shopping season.
It’s a worry that the National Retail Federation (NRF), U.S. Chamber of Commerce, International Council of Shopping Centers and other retail groups have had in recent days.
“When consumers cut back their spending, it threatens jobs in every industry. If it’s bad for retail, it’s bad for the economy, and ultimately the biggest losers are American taxpayers,” noted NRF President Matthew Shay.
Promotional Pace Steps Up
Several consumer studies revealed this week that U.S. shoppers plan to cut back on some aspects of their shopping, including self gifting. But they will be bargain-hunting earlier, using their smartphones to check prices and opting for gift cards in some cases.
Well aware of the highly competitive—and promotional—character of this year’s holiday shopping season, retailers are stepping up promotions and extending free shipping offers. They’re also extending hours during the all-crucial Black Friday weekend when more retailers plan to open earlier—Macy’s surprised by announcing an 8 p.m. Thanksgiving eve opening.
While the general retail market is hyper aware of consumer sentiment in the weeks ahead, so is LVMH, the world’s largest luxurygoods conglomerate. It sales, which had appeared seemingly immune to recession recovery, have slowed, especially in fashion and leathergoods, its biggest markets.
Meanwhile, Apple hopes to reinvigorate its retail stores and online by hiring Angela Adrendts, chief executive at Burberry, to run its world-wide retail network.
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