How Elections Impact Retail Sales

With the U.S presidential election happening today, retailers are looking forward to consumers to dive back into their annual holiday shopping routine.

Many retailers believe that consumers have been too distracted to shop during the election. Instead, they have been watching election coverage on their televisions and smartphones. According to ShopperTrak, this is not a new phenomenon. During the 2004 election, retailers saw a 0.7% year-over-year decline in sales and a 2.2% drop off the week before Election Day.

“The election here in the United States is a level of uncertainty that’s probably unsettling consumers right now,”said Gap Inc. CEO Art Peck.” A National Retail Federation flash poll found the uncertainty associated with the elections creates anxiety amongst consumers who are more cautious with their spending.

Even with rising consumer confidence and employment gains, large retailers have been disappointed with sales. In the third quarter, Retail Metrics reported that 49% of U.S. chains increased same-store sales, the highest since the recession in 2009. Retailers, such as Barnes & Noble, HSNi (Home Shopping Network) and restaurant chains such as Wendy’s blamed consumer concerns and sluggish sales on the presidential campaign.

Holiday spending is predicted, however, to bounce back. The NRF expects retail spending to climb 3.6% in November and December, which would make the 2016 holiday season the best in years.