The government shutdown is keeping retailers from Wal-Mart to Macy's from seeing key economic data that helps them plan their businesses and may ultimately threaten the all-important holiday shopping season, according to the industry trade group National Retail Federation.
The group, which says 42 million Americans work in retail and related fields, wrote a letter calling on lawmakers to immediately end the shutdown, saying only the collapse of Lehman Brothers in September 2008 "has done more damage to consumer confidence in such a short period of time."
The shutdown ultimately risks imperiling the potential $600 billion in holiday sales this year, which accounts for about one-fifth of retailers' annual revenue, the group wrote. The eVerify system used to determine immigration and citizenship status of new hires is down because of the shutdown at a time when retailers are hiring more than 700,000 seasonal workers. Retailers already have more than 4 million cargo containers of merchandise on their way to stores for the holidays, but it's unclear if they will be processed correctly because a number of government agencies that participate in clearing cargo have furloughed staff members.
"Even if Customs and other agencies can get that merchandise off the docks without a hitch, shutdown-fueled consumer worries over the economy could leave that merchandise sitting on shelves well past Christmas," the group's president, Matthew Shay, wrote in the letter. "That would be a severe hit not just for retailers but in every industry whose jobs depend on consumer spending."
The industry also probably isn't going to be able to see monthly retail sales numbers on Oct. 11.
"The long-term success of our nation's economy requires long-term solutions that will take more than a few days to find," the group wrote. "But in the short-term, Congress needs to reverse the economic crisis it has created through the shutdown while it is still a short-term crisis and not the beginning of another recession."
Sapna Maheshwari is a business reporter for BuzzFeed News and is based in New York. Maheshwari reports on retail and e-commerce.
Contact Sapna Maheshwari at email@example.com.
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