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Holiday Shopping

A survey taken 3 weeks ago by the National Retail Federation found 25% of shoppers said the result of the presidential election would affect their holiday spending plans.

One woman interviewed by USA Today said, “I’m definitely going to spend less because I have investments.’’ She added, “That money … was for my daughter’s future, and it might be wiped clean. I’m devastated."


NRF Remains Hopeful

While shoppers remain uncertain, the NRF is hopeful that the Trump administration will listen as it attempts to educate lawmakers on the retail sector’s priorities.

NRF President and CEO Matthew Shay said, “If this election taught us anything, it is the importance of focusing on policies and programs that not only benefit today’s economy but the economy of the future.”

Policy Perils

Months of weak sales have left retailers leery. For some, the prospect of a pending Trump presidency alone could cause problems moving forward. For example, Trump’s promises to restrict immigration and trade could have a huge negative impact according to a recent report from Morgan Stanley.

A deportation-linked decline in consumer demand and labor, for example, could wipe out any spending benefit from lower taxes. Among retailers identified as most likely to be hurt would be fast food chains, Jack in the Box Inc. (NASDAQ:JACKC), El Pollo Loco Holdings Inc. (TSX:LOCOC) and Wingstop Inc. (NASDAQ: WING).

Potential Boost For Some

On the other hand, Trump’s business tax reform agenda could actually help some consumer-focused companies such as Home Depot Inc. (NYSE:HDC) and TJX Cos. Inc. (NYSE:TJXB). According to Morgan Stanley, Trump’s promised corporate tax reform could result in a rise in profits of almost 30%.

A further boost may come from Trump’s realization, once in office that some of his stated policies may cause more harm than good. One estimate, for example, suggested that the price tag for removing 11 million undocumented workers from the U.S. could be more than $600 billion – roughly the gross domestic product of the entire state of Texas.


Overall Projections

Experts conclude that the uncertainty a Trump presidency brings means large purchases will be put off, including cars. Bad news for General Motors Company (NYSE:GMA) and Ford Motor Co. (NYSE:FC).

Smaller purchases are expected to recede on a temporary basis but eventually recover, especially for Trump supporters. This could bode well for rural and small town retailers like Wal-Mart Stores Inc. (NYSE:WMTB) and online retailers like Amazon.com (NASDAQ:AMZNC).

There is some speculation that the fashion industry will see renewed interest thanks to attention paid to the Trump women – Melania and her stepdaughters. This could drive traffic into department stores like Macy’s Inc. (NYSE:MB), Dillard’s Inc. (NYSE:DDSC) and Kohl’s Corp. (NYSE:KSSB).

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