Congress, Consumer Confidence, and Holiday Spending

In the last 90 days, we've done training workshops for retailers of all sizes in Orange County, Kansas City, Cleveland, and Indianapolis. In private conversations with many of them we've repeatedly heard the same refrain: "Those turkeys in D.C. are scaring the bejeebers out of our customers! Consumer confidence is being ruined!!!"

As readers of this blog know, we believe that consumer confidence is the true leading indicator of retail performance. Uncertainty about their economic future undermines consumer confidence. The continuing Congressional stand-off on economic policy is only heightening this uncertainty.

Then today we read this report from Yahoo! Small Business Advisor. The last paragraph should be used by demonstrators on The Mall in D.C. Here's the key quote by a retailer from Maryland: 

“We’re finally about to have a Christmas season tacked onto the end of a good year. The last thing I want is to have the news dominated by fear-mongering to scare the heck out of all my customers,” he said.

 Some background leading up to the testimony, as reported by Yahoo! Small Business Advisor.

The Small Business Majority flew in 14 entrepreneurs from around the country for two days of meetings with House Minority Leader Nancy Pelosi, Senate Small Business and Entrepreneurship Committee Chair Mary Landrieu, and members of the U.S. Small Business Administration. They discussed access to capital, healthcare reform, clean energy policies, and legislative solutions to economic issues such as jobs creation. And the entrepreneurs urged Congress to pass bipartisan legislation allowing more credit unions to lend to small businesses.

Mike Brey, president of the Laurel, Md. business Hobby Works and a member of the Small Business Majority's Network Council, told Yahoo! Small Business Advisor that he built his company on the back of SBA 7(a) loans. He said he told legislators that, “While things have gotten better, the way banks use SBA loans have changed. It appears to us that banks are using the SBA to guarantee loans that in a different economic climate they would have been making without SBA.” Brey told legislators and SBA officials that he’s had a good year and would like to open two new stores now and asked, “How can we free up some of those loans that used to be [available] again?” 

Brey recalls how much stronger his business was when the federal budget was balanced. He said he would be willing to pay higher taxes if it helped get the economy on track and pay down the debt. “For me, going back to those tax rates is the tradeoff for having a stronger economy and more customers. It’s a trade off I am absolutely willing to make,” he told Yahoo! Small Business Advisor. 

During his visit to the White House this week, Brey told officials that his toy and hobby supplies retail business does best when customers have confidence that they will have money in the future. 

“We’re finally about to have a Christmas season tacked onto the end of a good year. The last thing I want is to have the news dominated by fear mongering to scare the heck out of all my customers,” he said. “It’s so important that the economic policies get the country back on a path to fiscal solvency.”

Wow! Leave it to a retailer to tell it like it is! Let's hope it's not in vain.