It’s only a week until Thanksgiving, and retailers are gearing up for a hectic and busy holiday season. The National Retail Federation released its most optimistic outlook about holiday retail shopping sales in years, anticipating an increase of 4.1% this year, to $616.9 billion nationwide. Holiday sales in the past 10 years have only grown by an average of 2.9%, so a significant boost in retail sales over previous years could help retailers in their slow but steady recovery from the 2009 recession.
And, more holiday shopping leads to more jobs. Nationally, retailers will hire between 725,000 and 800,000 temporary workers this year. This seasonal employment gives many workers the starting experience they need for the chance for a long-term position in retail.
But this year, there’s a serious unexpected problem for west coast retailers: will stores be able to get their merchandise in time for the holidays? Ports up and down the west coast are experiencing delays as 20,000 longshoremen currently working without a contract enact slowdowns. The International Longshoremen and Warehouse Union’s agreement with the Pacific Maritime Association (which represents ports and terminals across the west coast) expired this last July, and, even after months of negotiation, no new contract agreement has been reached.
West coast ports are vital for the U.S. economy. About 12.5% of U.S. GDP is linked to west coast ports, and a study by the National Retail Federation estimates a west coast port lockout or strike could cost the economy $2 billion per day. And it’s not just retailers that are impacted by slowdowns or shutdowns; farmers aren’t able to ship their products, leading to food spoiling. Manufacturing businesses are left without crucial base materials, and may have to layoff employees for the duration of a slowdown.
For some companies, flying in merchandise instead of sending it on a cargo ship is an option. But, air freight often costs 10 times more than ship freight, and higher shipping costs mean higher costs to consumers. If the west coast port slowdown continues – or is allowed to worsen into a strike or lockout – holiday shopping will suffer not only from lack of products, but also from the smaller paychecks many manufacturing employees will receive, as companies are forced to impose temporary layoffs while cargo is delayed.
What does the port slowdown mean for consumers? According to a consumer survey by the National Retail Federation, the average shopper is planning to spend $804 this holiday season. But, if stores’ merchandise does not arrive in time, shoppers won’t spend as much, and the west coast’s economy may experience a disappointing holiday season.