Washington—The National Retail Federation (NRF) today joined a growing chorus of business leaders across many industries to call upon President Barack Obama and Congress to come up with a bipartisan plan to avoid the “fiscal cliff.”
With the peak holiday shopping season starting on Nov. 23, Black Friday, the NRF maintains the looming uncertainty over the pending combination of tax hikes and spending cuts threatens consumer confidence during retail’s most crucial season.
“Although most economists have focused on the impact to the economy in 2013, more immediate economic consequences could occur over the next few weeks if consumers lose confidence in the ability of policymakers to work together to solve tough problems,” said Matthew Shay, NRF president/ceo. “Any disruption to consumer confidence and spending during this season could prompt a crisis for retailers and the millions of U.S. jobs the industry supports.”
Instead of waiting for the New Year’s Eve deadline, Shay said Washington needs to act immediately, preferably before Thanksgiving.
“Demonstrating the ability to work in a bipartisan manner will ease consumers’ worries and avoid severe economic consequences during the single most crucial spending season of the entire year,” Shay said.
Shay’s comments came in a letter sent today to the president and all members of the House and Senate. It follows on the heels of a meeting between President Obama and top CEOs from Pepsi, Honeywell, General Electric, Xerox, IBM etc. (including Walmart CEO Mike Duke) who were also expressing their opinions and concerns about the fiscal cliff and its effect on business.
Shoppers Say Fiscal Cliff Concerns To Affect Their Holiday Spending
On Wednesday, during his first press conference since winning re-election, President Obama, commenting on the fiscal cliff negotiations, said, “I’m open to compromise,” Obama said, “but I refuse to accept any approach that isn’t balanced.”
Obama again reiterated one of the his chief demands: that Congress send him a bill extending existing Bush tax rates for all but the top income bracket, something which Republicans have refused to do for the better part of this year for fear of losing a bargaining position.
“There is a package to be shaped, and I’m confident that parties — folks of goodwill in both parties can make that happen,” Obama said. “But what I’m not going to do is to extend Bush tax cuts for the wealthiest 2% that we can’t afford and, according to economists, will have the least positive impact on our economy.”
In the NRF letter, Shay noted that retailers make quarter or more of their annual sales during the November to December holiday season. NRF is forecasting that holiday sales will increase 4.1% to $586.1 billion this year. In a recent NRF survey, about two-thirds of shoppers said the fiscal cliff and other economic concerns would affect their holiday spending.
“It is particularly important during this debate that lawmakers listen to small businesses, including the independent Main Street retail stores that are some of our nation’s most important job creators,” Shay said. “Many small business owners report their business income on their personal income tax returns and will be critically impacted by the outcome of this debate.”
Despite the prominence of large chains, 96% of U.S. retailers are small businesses with only a single location, and 26% of NRF members have less than $1 million in annual sales.www.nrf.com