Af­ter elec­tion, are US shop­pers ready to think about hol­i­days?

Kuwait Times - - BUSINESS -

The un­cer­tainty sur­round­ing who will be the next US pres­i­dent is over. But with peo­ple still bit­terly di­vided, are they ready to think about a hol­i­day shop­ping sea­son that thrives on feel­ings of joy and peace?

Reports from re­tail­ers, in­clud­ing depart­ment stores like Kohl’s, Macy’s and J C Pen­ney, showed that shop­pers had been start­ing to step up their spend­ing in the weeks lead­ing up to the elec­tion won by Repub­li­can Don­ald Trump. And the com­pa­nies are gen­er­ally op­ti­mistic about a good hol­i­day sea­son, point­ing to higher wages for work­ers and leaner in­ven­to­ries.

“A rel­a­tively happy em­ployed con­sumer base is a will­ing group of con­sumers,” said Greg Portell, a part­ner in A T Kear­ney’s con­sumer prod­ucts and re­tail and com­mu­ni­ca­tions, me­dia and tech­nol­ogy group. Point­ing to the po­lit­i­cal en­vi­ron­ment is an easy ex­cuse for re­tail­ers, an­a­lysts said. Even af­ter the ran­cor of the cam­paign, they be­lieve, Trump sup­port­ers will be in the mood to spend and those who sup­ported Demo­crat Hil­lary Clin­ton or an­other can­di­date may shop as a balm on their emo­tions.

“It’s re­tail ther­apy ei­ther way,” says Mar­shal Cohen, chief in­dus­try an­a­lyst at NPD Group, a mar­ket re­search firm. What the depart­ment stores were see­ing be­fore the elec­tion was a bit of a mixed bag. Macy’s and Kohl’s raised their sales outlooks this week as they saw im­prove­ment, even as they posted an­other quar­ter of smaller de­clines. Nord­strom re­ported an in­crease in the key sales mea­sure, and raised its earn­ings out­look.

But Pen­ney cut its an­nual out­look for a key sales mea­sure af­ter re­port­ing a sur­prise sales drop as it wres­tled with weak cloth­ing sales. Macy’s had specif­i­cally cited strength in ap­parel, across the men’s, women’s and chil­dren’s de­part­ments. Like some other re­tail­ers, Pen­ney’s business has been volatile, bounc­ing back in the sum­mer af­ter a tough start to the year.

In gen­eral, a dip in buy­ing is nor­mal be­fore a pres­i­den­tial elec­tion as peo­ple are dis­tracted and ad­ver­tis­ing space is taken up by po­lit­i­cal ads, but spend­ing usu­ally bounces back af­ter­ward. In 2012 and 2004, year-over-year sales growth slowed an av­er­age of 22 per­cent in Septem­ber and Oc­to­ber, from the Jan­uary through Au­gust pe­riod, but re­bounded an av­er­age of 16 per­cent in Novem­ber and De­cem­ber, ac­cord­ing to con­sult­ing group AlixPart­ners.

Pen­ney’s CEO Marvin El­li­son said it was hard to quan­tify how much the up­com­ing elec­tion af­fected business in the third quar­ter but that business ac­cel­er­ated in Oc­to­ber, the last month of the pe­riod. But he noted from an eco­nomic stand­point, shop­pers “are in re­ally good shape,” he added. — AP

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