As the government shutdown nears a record-breaking run, retailers like Best Buy and Bed Bath & Beyond could start to feel the bite from lower consumer spending.
With 800,000 federal workers not being paid and a potential delay in tax refunds, the economic effect of the partial government shutdown could be at least $2 billion per week, according to Wells Fargo retail analysts.
The retailers that would be hurt the most include those that sell more discretionary goods such as Best Buy and Bed Bath & Beyond and those operating in regions with high government employment, including Ulta Beauty and Dick’s Sporting Goods, the bank predicted.
Retailers that sell household necessities may have more of a cushion now, but “if the shutdown were to eventually impact benefit programs like SNAP, players like dollar stores, Walmart and Kroger could feel pressure,” Wells Fargo’s Zachary Fadem said in a note to clients Friday. “On the other hand, history illustrates that prior shutdowns had limited impact on retailers with staples-like characteristics, including grocers and auto part retailers.”
Wells Fargo is not alone on Wall Street seeing the damage from the shutdown hitting retailers. Jefferies took a closer look at the areas with the most workers affected by the shutdown — Washington, D.C., Maryland and Virginia. Companies including restaurant chain Chuy’s, and retailers The Container Store and Nordstrom, that have a higher percentage of locations in those areas will likely experience more damage, Jefferies said.
“Impact from the government shutdown could extend well beyond some restaurants in DuPont Circle, “Jefferies’ Laurence Alexander said in a note Tuesday, referencing a section of Washington, D.C.
from Viral News Reports http://bit.ly/2SQS2JE
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