Have you looked at
) home page lately? The ads rotate often, but somewhere around the
upper right corner of the page, near the ad for the Halloween Shop,
you'll see a new ad. Yep. It's the Holiday Toy List.
Before we've even handed out the fun-size Halloween candy bars, the
countdown to the year-end holidays has begun, complete with Daily
Lightning Deals on gifts for all ages.
This is not holiday cheer busting out. It's a case of bad nerves.
Some of the concerns over this holiday season date from before the
federal government shutdown that ended last week. However, the
crisis added to the uncertainty because its resolution actually
resolved nothing. Current government spending levels were
authorized only until January 15. The agreement to raise the debt
ceiling expires on February 7. The slugfest will resume, and soon.
) did not mention the government crisis specifically in its
quarterly report last week, but the company's generally
for the current quarter raised red flags among investors.
The company was looking at trends that are, at least from its
viewpoint, bigger and longer-term than a political squabble in
Washington: that is, the decelerating rate of growth in online
shopping, and a consumer mood that may be improving slowly but is
still cautious, and even fragile.
An index of consumer sentiment by Thomson Reuters/University of
Michigan dropped to 75.2, its lowest level in nine months, in a
preliminary reading released Oct. 11. The
report by Reuters
concluded that a prolonged shutdown "would exact a toll on consumer
spending and the overall economy."
We now have
an estimate of the toll
to date: $24 billion, or 0.6% of the year's gross domestic product,
according to Standard & Poor's Ratings Service. That figure
covers non-government business losses and spending interruptions
directly attributable to the shutdown.
A retail analyst
New York Times
that the government shutdown "eroded two years of gains in consumer
That may be why Amazon.com is kicking off its Daily Lightning Deals
early. And many other online retailers will be pulling out all the
stops, with stepped-up marketing campaigns, more sales, and earlier
Online and in the real world, the promotions will go into high gear
with sales on Thanksgiving Day. The holiday opening was
controversial two years ago; somehow it is now an American
Adding to the general nervousness is an unusually short holiday
shopping season. At least Congress can't be blamed for scheduling
Thanksgiving for Nov. 28.
The most upbeat forecast publicly comes from a company that has
stumbled online but is ubiquitous in the real world:
At a recent meeting with analysts and investors,
the upcoming holiday season would be its best ever, in spite of-or
perhaps because of-the economic uncertainty. Like other
budget-oriented retailers, it is meeting consumer frugality with a
layaway program that allows its customers to pay over time. Tablet
computers were among the top five categories of items currently on
With only about 1% of its sales, or about $5 billion, coming from
its website last year, Wal-Mart is finally
trying to compete
online with Amazon.com, which has about $34 billion in sales.
The National Retail Federation
that holiday spending overall will increase 3.9% this year, to
$602.1 billion, a slight improvement over the past two years. But
its forecast is loaded with cautionary language about the general
sense of uncertainty among consumers. In its survey, 29% said fear
of the effects of political gridlock would affect their spending
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