Government Shutdown May Impact Holiday Shopping As Retailers Scramble for Customers 

Labor Landscape

The prolonged government shutdown, the third longest in U.S. history,  could slow holiday shopping as consumers struggle to afford basic services like food, shelter and transportation, according to Robert Strauss, a professor of economics and public policy at Carnegie Mellon University. 

Sara Hargreaves, owner of Scribe Fine Stationery in Pittsburgh, Pa. reports consumers are very cautious about what they buy now.  And Herb Wellor, an independent candy maker in Lancaster Pa., said his Christmas candy orders have declined by 50 percent. 

 Just as retailers begin to push their holiday marketing into full gear, the government shutdown could force  marketers to switch up their plans with efforts tailored toward bargain shoppers who will likely be researching prices via  their mobile devices. 

Mobile marketing has the benefit of being content-specific, according to the National Independent Retail Associations.   The association said that retail operators will be able to identify underperforming markets – like locations where government work and contracting are major elements of the economy – and target specific value and price promotions to mobile users in those markets.  

 “Still, Strauss points out that it is difficult to preserve pricing in some relatively less affected areas because there are so many other factors that play on how consumers will spend over the holidays.

Amy Wofford of the Woffords Christmas Tree Farm in Rural Valley, Pa. said so many different factors impact how trees sell over the holidays. “We can be impacted by weather and other factors like families opting for other holiday decorations,’’ Wofford said. “It is difficult to focus on one thing that slows consumer purchases, ‘ she said. 

 Ironically, the holiday spending report for 2025 says consumers will spend $200 more on gifts this season or $1,595 a person –but  a 10 percent drop from 2024. 

“We have to remember that consumers are struggling with higher food and fuel prices this holiday season, too.‘’ said Strauss. 

 As a whole, a Christmas meal and gingerbread, a popular holiday treat, will be costlier in the U.S. this year thanks to popular ingredients experiencing year-over-year price increases.  The commodity data provider found prices for the main meal – measured by the Main Meal Index as part of its Christmas Dinner Index – posted a 2.3 percent jump from last year. The index looked at turkey, pork , beef, shrimp, lamb, potatoes, sweet potatoes, carrots and turnips.  

This holiday season, consumers will shell out more than $261 on food, candy decorations and other non-gift items, according to the National Retail Federation.  

“I think what people forget is that all our deportation of immigrants takes workers away from picking fruit and food and decreases the amount of food available which makes it more expensive,’’ said Strauss said, 

Then there is the increased problem of consumer debt in 2025.  Data from the Federal Reserve Bank in New York shows average credit card debt among cardholders with unpaid balances was $7,321, up 5.8 percent from $6,921 in 2024. 

The government shutdown is now more than three weeks old with lawmakers still at odds over health care subsidies. The Senate has continuously failed to advance a GOP-backed plan.

“It is going to be a bleak holiday season for my family,’’ said Connie Berk of Potomac, Maryland, who got layed off from a small company that services government contracts.   “We may not even get a Christmas tree this year,’’ she added.  “What they should do is fire all the people in Congress and simply start over,’’  Berk quipped.  

The shutdown has already resulted in approximately 750,000 federal employees being placed on furlough and the U.S. Department of Agriculture issued a warning that there will not be enough funding to pay the entirety of supplemental Nutrition Assistance Program (SNAP) benefits for November if the shutdown doesn’t end, according to officials, impacting over 42 million individuals across the country who rely on it. . 

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