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Thailand: Consumers are – mostly – putting spending on hold while they wait for election results
That uncertainty, retail analysts say, deals yet another setback to an industry that has already dealt with its share of challenges this year. Consumer spending, which typically drives about two-thirds of the economy, suffered a huge blow early in the pandemic, though it has been ticking up in recent months. But with inconclusive results casting new doubts about the country’s political and economic future, some worry that those gains could soon be wiped away.
“Covid-19 is running rampant, there was no vaccine by Election Day and unemployment is still at grotesque recessionary levels,” said Mark Cohen, director of retail studies for Columbia Business School. “Roll that up in a ball, add in the vagaries of the election, and it all speaks to a pretty grim holiday retail season. This is not going to be a banner year for sweaters and handbags.”
Americans spent $2 billion online on Election Day – a 27% increase from a year earlier, but still about 11% less than in the preceding two days, according to Adobe Analytics, which analyzed more than 1 trillion visits to U.S. retail sites. The group said it expects online sales to dip by as much as $300 million on Wednesday while the country awaited election results.
“Consumers generally do not like uncertainty in any form and tend to pull back on spending during unpredictable times,” said Vivek Pandya, senior digital insights manager at Adobe. But, he said, he did not expect a “material impact on overall holiday sales.”
While some Americans may have stocked up on non-perishables and toilet paper in recent days, because of supply chain concerns or fears of election-related unrest, analysts say they don’t anticipate panic buying to pick up in coming weeks. Overall holiday spending is expected to be tepid this year, with Deloitte predicting sales growth between 1% and 1.5%.
“Consumer spending is on hold now while the election is being contested,” said Greg Portell, a partner in the global consumer practice at consulting firm Kearney. “There’s so much uncertainty and angst on both sides of the debate that consumers aren’t going to be prioritizing shopping in any way.”
Matthew Shay, chief executive of the National Retail Federation, on Wednesday urged Americans to “be patient and peaceful” while votes are being counted. But, he said, he doesn’t think the uncertainty of the election will translate to a long-term dip in spending.
“A temporary moment of uncertainty is not going to be consequential in terms of consumer behavior,” he said in an interview. “Consumers have demonstrated that they are resilient and have the ability to not be distracted by external factors that out of their control.”
And while some consumers and retailers reported “stress shopping” for items like winter sweaters, face creams and candles this week, analysts say many more are putting off major purchases until there is more certainty.
“If the last election is any indication, people may be anxious for a few days but then things get back to normal pretty quickly,” said Sucharita Kodali, an analyst for Forrester. “Half of the country will be thrilled with the results no matter what happens.”
On election night, Nikole Watson, 29, was perched on her couch, scrolling through her phone while voting results puttered in. When ads for warm, cozy clothing popped up on Facebook and Instagram, she couldn’t resist. She ended up buying two sweaters and two coats, in hopes that they’d give her the kind of “instant gratification” she wasn’t getting from the news. But, she says, she’s put off bigger-ticket items like furniture until she has a sense of which way the country – and the economy – are headed.
“There is so much anxiety out there, so I don’t want to make a huge purchase right now,” the 29-year-old executive assistant said. “Instead I’m gearing toward small purchases that make me feel better.”
Source: https://www.nationthailand.com/business/30397363?utm_source=category&utm_medium=internal_referral