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Retailers worry government shutdown may affect holiday spending

Some holiday decorations are already available at Costco

Some holiday decorations are already available at Costco in Westbury. Retailers hope that the resolution to the U.S. budget and debt ceiling crisis, will help shoppers open their wallets. (Oct. 1, 2013) Credit: Newsday / Karen Wiles Stabile

Political gridlock was poised to weigh down consumer spending during the holiday season, but Long Island retailers and experts are crossing their fingers that Washington's stalemate, now resolved, will have little effect on local spending.

In a survey of holiday spending plans released Wednesday by the National Retail Federation, 29 percent of shoppers said the political gridlock around U.S. fiscal concerns would somewhat or very likely affect their spending plans. The situation would affect shoppers ages 55 to 64 the most, with 32.7 percent indicating they were somewhat or very likely to alter their spending plans.

However, an 11th-hour resolution to extend the country's ability to borrow until Feb. 7 and fund federal agencies through Jan. 15 appeared to give retailers and cautious consumers a reprieve.

"The good news is that if they fix it, the consumer doesn't care," said Marshal Cohen, chief industry analyst for The NPD Group, a Port Washington market research firm. He was waiting for a deal to be signed to be certain the crisis had been temporarily averted. "It doesn't have long-term ramifications as long as it's resolved early enough."

Merchants probably will have to make up for a slower than expected October, so that could mean more aggressive discounts in November, he said.

The effects of Washington's impasse on Long Island shoppers were mixed. Carole Singer, owner of Carole's Corner Fine Jewelry Boutique in Northport, said she hadn't seen any changes in shopping behavior, noting that the holiday rush had not yet begun. Singer is expecting increased holiday sales this year and an extended holiday shopping season, with Hanukkah starting on the evening before Thanksgiving.

But other retailers said they did see a slowing of shopping traffic and buying over the last two weeks, since a partial government shutdown began Oct. 1. Over the Columbus Day weekend, shopping traffic was down 40 percent to 45 percent, said Florence Leniston, owner of Bubba Brown's Treasures in Port Washington. She and other downtown businesses have sponsored events for Halloween and the upcoming holidays to try to revive the shopping momentum, she said.

Pat Turner, owner of Roomors Gift Shoppe in Babylon, also noticed the flow of shoppers has slowed, making a challenging year more difficult. Many of her customers are still rebuilding after superstorm Sandy.

"Our confidence in our government is down," Turner said. "There will probably be some trickle-down effect, and that might affect everybody."

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