As an independent small retailer, can you imagine…
- Not having to balance your checking account?
- Not having to communicate with staff, vendors or landlords?
- Shutting down your business during the most important quarter of the year?
- Spending more than you earn?
- Ignoring the debt as it grows year after year and then wondering; “wow how did it get so large and who is going to pay for it?”
Welcome to our Government. I was recently interviewed by a local television station as well as the Wall Street Journal on the impact of the government shutdown on Hampton Roads retailers. Here are some of the excerpts.
Just as we expected to continue our meager recovery from one of the worst recessions in history, leave it to the Government to throw a wrench into the works.
Although the National Retail Federation has forecasted, in spite of the government shutdown, an increase of holiday shopping of 3.9%, up from 3.5% last year, that prediction is not indicative of Hampton Roads. Our region relies on defense spending, as it impacts our economy to the tune of 42%; down from 47% prior to sequestration (defense cutbacks are not over for Hampton Roads). This is not a sign of diversification, rather, a reduction of overall revenue.
Although foot traffic was up during the first week of the shutdown, week two, three and beyond will have severe consequences on consumer confidence in the region. Hampton Roads is home to 90K military personnel and 50K civilian personnel just on our naval bases and shipyards alone, with the exception of Langley AFB and NASA. This does not take into consideration the thousands of government contractors that rely on government to be open but have been furloughed indefinitely.
Those retailers such as restaurants, stores, salons, etc that are located in government offices or in the vicinity have been impacted immediately. During a recent Retail to Retail networking event on the evening of the shutdown, I spoke with restaurant owner, Martha Bennett of Momo’s Café and asked what the impact was to her business. “Yesterday I had a full house for breakfast, today I had one breakfast”. Think about the lost inventory, lost sales, lost business, and, in her case, lost revenue that can never be re-captured.
As a region, we need to strive for diversification, we need to entice manufacturing, we need to invest in infrastructure, we need to take advantage of our most important asset; our port. We also need to support each other, buy local when possible and be smart and savvy with holiday planning.
Retailers are resilient, they can weather this storm. Why, do you ask? Because they know how to balance their books, care for their staff, communicate with vendors and pay their bills without shutting down their operation. Let’s hope our country’s entrepreneurial spirit can influence Congress and the Administration to resolve their issues and open the doors; like small business that’s what they are paid to do!
Editor’s Note: At the time of posting, Congress had managed to get their act together and come to an agreement. Let’s hope their doors stay open and they work through their problems and resolve them this time and not kick the proverbial can down the road.