An already-slumping economy – now coupled with the impact of the September 11 terror attacks and the certainty of war – has cast a cloud of uncertainty over the fourth quarter for the nation’s retailers.
So far, the National Retail Federation (NRF) has revised its fourth quarter projections and a Consumer Board survey shows a drop in consumer confidence.
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Yet Sarah Crawford remains undaunted.
Crawford opened a baby clothing, accessory and furniture store called Bambini in Providence just days after the attacks.
“I don’t think I could have opened at a worse time,” she said. “However, this last week has really proved that even in the midst of a terrible tragedy, parents want to create a safe, pretty, sweet environment for their babies.”
That people have been coming in to buy baby gifts for friends or to order a crib has been reaffirming, Crawford said. But, she admits that she is concerned.
“I don’t know what the future holds – the market is up some days, down some days. If we don’t go back to life, the terrorists are going to have won over so much more than they ever thought,” she said.
Other retailers, too, pledge to persevere.
Rick Concannon, owner of Concannon Jewelers in Cranston is cautiously optimistic.
“If I pull back, if I don’t try things that are new, I’m dead – no matter what the economy is,” he said.
Concannon invested in the expansion of his Pawtuxet Village store in June.
“I joke to other people in the jewelry business, ‘The numbers are down, I think I’ll expand,'” he said.
Holiday season at the store generally means hiring one or two extra people and recruiting family members’ temporary help – plans Concannon said will go forward this year as planned.
“I think the way to get through this is to bull ahead,” he said. “If you take it too seriously, you perpetuate it. Didn’t we learn that during the Depression?”
In Smithfield, Providence-based architects Robinson Green Beretta Corporation is coordinating the design and construction of The Crossing at Smithfield, a $50 million retail complex set to include more than 25 stores including Barnes & Noble, The Gap and Staples.
Construction at the 77-acre site is under way, with the first phase of the project slated to open in January 2002.
And Leslie DaCosta, marketing director for Providence Place, said that holiday events planned for the shopping center will proceed according to plan.
“We’re looking forward to a great holiday season,” she said.
Staffing firm Manpower Inc. projected a favorable fall job market for Rhode Island’s capital city in its August employment outlook survey. Manpower Vice President and Chief Operations Officer Susan Fabrizio is hesitant to make any retractions in light of the terror attacks.
“It’s hard to say,” she said. “We do the survey a couple of months in advance. I’m not seeing or hearing any plans to cut back, but that’s a personal opinion. The next employment outlook survey is going to be very telling.”
According to the NRF’s Retail Sales Outlook report, GAF (general merchandise, apparel, furniture, home furnishings, electronics and appliance stores) sales growth for the fourth quarter has been revised to 2.2 percent compared to the previously forecast 4.0 percent.
In addition, NRF is predicting 2001 holiday retail sales to increase 2.5 to 3.0 percent.
“Since the terrorist attacks are so fresh and our country’s response not yet known, it is premature to make definitive judgments about the economy,” said NRF Chief Economist Rosalind Wells.
According to NRF members, consumers are out shopping but are purchasing a limited range of products.
“With a few notable exceptions, such as American flags, consumers are currently focusing on basics, buying out of necessity not desire,” said NRF President and Chief Executive Officer Tracy Mullin. “We expect consumer spending patterns to begin to return to normal levels as the holiday season approaches.”
A survey released by business research organization The Conference Board indicates that nearly half of consumers (47 percent) believe the recent tragedy will send the U.S. into recession while 53 percent do not believe these events will trigger recession.
Slightly more than 30 percent said they or a member of their household would be postponing or canceling plans to travel by airplane because of the September 11 tragedy, but nearly 70 percent said they were not postponing or canceling air travel plans.
Consumer spending accounts for about two-thirds of U.S. real GDP (gross domestic product), making consumer confidence a key economic indicator.
While consumers do feel the country is headed toward recession, an overwhelming majority of those polled said they do not have plans to postpone major purchases such as cars, appliances and homes.
“While nearly 90 percent of consumers say they will not cut back on their buying plans, it’s important to note that this figure is very likely to fall as widespread layoffs begin to materialize,” said Lynn Franco, director of The Conference Board’s Consumer Research Center. “So far, consumers have helped the U.S. steer clear of recession. The likelihood of this scenario continuing is dwindling as the economic ramifications of the terrorist attacks continue to unfold.”
