And now, to round out the gloom and doom that retailers face, Wal-Mart Stores Inc. (NYSE:WMT) closed down 2.75 percent on Wednesday, chasing a statement made by CEO Mike Duke on Tuesday night at the Council of Foreign Relations. Duke explained that before the presidential election in November, only 25 percent of consumers knew what the term “fiscal cliff” meant.
“One week after the election it was up to 75 percent,” said Duke, according to Reuters. He added that 15 percent of those consumers said the conversation in Washington would affect their Christmas spending behavior.
The news is obviously not great for an economy that is fueled by consumer spending and an industry that depends on holiday sales for an out-sized portion of its annual revenue.
But this should hardly come as a surprise. The folks at the National Retail Federation became bad-news bears in the middle of November, when they released a statement urging leaders in Washington to find a solution to the fiscal cliff by Thanksgiving. An NRF survey indicated that two-thirds of shoppers said the fiscal cliff and other economic concerns would affect their holiday spending.
Given the numbers from Black Friday and Cyber Monday, a dramatic “retail crisis” doesn’t seem to be in the mix this holiday season. But it is clear that fiscal cliff concerns are building as the deadline approaches, and market participants seem to be entering survival mode.