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Episode 14: Post-Election Check-in: New Administration, New Regulation (Part 1)




Announcer: Welcome to this episode of “60-second Retail” - a BDO podcast keeping you in-the-know on events and trends in retail and consumer products industry impacting your bottom line, in just a few short minutes.

Natalie: Hello, my name is Natalie Kotlyar. I am the National Leader of the Retail and Consumer Products industry group at BDO USA.  In this episode we are doing a post-election check-in on the new administration’s regulations and the impact they may have on retailers.

We’ve all heard the saying ‘with a new year comes new possibilities’, and this year, it also comes with a new administration, which means new regulatory changes that may impact retailers.

It’s critical for retail companies not to lose sight of the impact of state and local elections. Many important economic development initiatives come at the state level, as do a multitude of tax liabilities. State and local governments may have the ability to move tax changes along at a faster rate than their federal counterparts. This could also have a direct impact for retailers.

In an October Adobe Analytics Survey, 26% percent of consumers said the presidential election outcome would affect their holiday spending. While 63% of retailers said they expect Americans will be more confident in spending post-election.

With voting behind us, retailers need to turn their attention to the new administration’s COVID-19 response and its economic impacts.

Getting the virus under control will have major implications for how retailers will perform over next several months, because it will, in part, dictate consumers’ willingness to go out and shop, how much money they’ll spend, and where they’ll spend it.

According to estimates from Yelp, more than 17,000 retail businesses have permanently closed over the course of the pandemic as states and counties issued public health orders to lock down storefronts in response to the virus.

The differences in how the pandemic has impacted larger retailers vs. smaller local businesses should not be overlooked. Smaller retailers especially will want to keep themselves apprised of the new administration’s plans with regard to boosting small business visibility. 

Many retailers are waiting to see the impact of the new stimulus package, which will play a key role in customer spending and potentially result in additional support for their business.

According to BDO’s 2021 Retail CFO Outlook Survey, 84% of middle market retail businesses secured some sort of outside funding in 2020, and 93% of retail CFOs said they plan to secure additional outside funding in the year ahead.

Retail sales always will be heavily impacted by political events—a reality retailers cannot afford to ignore.
 
Announcer: And that concludes this episode of BDO’s “60-second Retail” podcast.  Don’t forget to tune in for the next episode!  To find more information on our hosts, guests, BDO’s services, or listen to previous episodes of “60-second Retail”, please visit www.bdo.com/60-second-retail.
 

 
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