Coronavirus & Politics – Cruising Should Not Be Retail’s Bruising

Our retail community stands with America, and we were immensely proud to have seen Walmart’s Doug McMillon and Target’s Brian Cornell with President Trump in the Rose Garden on Friday, as we unite in the fight against the coronavirus. Retail with do its part, whether by donating space in parking lots for drive-through testing, or by vowing to keep essential stores open, or by closing select locations to prevent contagion. Retail will be there for America.

However, two questions are on our minds:

1.    Will the Administration return the favor, by suspending the arbitrary tariffs that are inflicting economic pain on the Retail Industry?

2.    Will the Administration continue to aggressively pursue their dialogue about creating a stimulus for the Cruise Line Industry, while refusing to budge on consumer tariffs?

Retail is keen to help in the day-to-day battle against the coronavirus, but why is the Cruise Line Industry getting so much attention in the conversation about stimulus funding, and why are we getting so little? The answer to that question is one that few in this Administration may want to hear.

*According to data from the Cruise Line International Association (CLIA), the industry employs about 422,000 Americans (and they directly employ 172,326).

*According to the National Retail Federation (NRF) the Retail industry employs about 42 million Americans (and we directly employ 29 million).

Hmmm – 422,000 Cruise employees vs 42 million Retail employees (direct and indirect)

*According to CLIA, the Cruise industry generates about $52.67 billion in total USA output.

*According to NRF, the Retail industry generates about $3.79 trillion dollars in total USA output.

Hmmm – $52.67 billion Cruise output dollars vs $3.79 trillion Retail dollars

A quick summary of the above data – indicates that our Retail industry employs about 41,578,000 more people than the Cruise industry and generates about $3.737 trillion dollars more than Cruise.

Hmmm – lets totally avoid a dialogue about the number of Cruise Industry employees in the battleground State of Florida, and totally avoid a discussion about who pays more federal taxes, since everyone understands that Cruise ships operate under “Flags of Convenience” and are registered outside of America.

Most recently, Retail consumers have been burdened with an additional tax called a tariff. This tax was placed on the American consumer by the Administration as a bargaining chip in their trade war against China. Politically, tariffs have created a new trade dynamic with China but, now that the situation has stabilized, most of the tariffs still remain in place and they have raised the cost of Retail, forcing many of us to borrow money. We are now in the unique position of having to take bank loans to pay tariffs that we no longer need. This situation has lowered our working capital, weakened our financial position (even with the Fed lowering interest rates to near zero), and is putting the heart of our business into distress.

While tariffs aren’t our only issue du jour, it’s a fact that the Retail industry shed 77,000 jobs last year and have announced the closure of 9,300 doors. As a reminder of our fragility, we sadly note that a major retailer – Modell’s – is now the latest victim suddenly thrust into bankruptcy. For years, consumers said we “Gotta go to Mo’s” but that’s over now, as this icon has fallen prey to difficult times. With the coronavirus outbreak, technicians are indicating that the number of Retail door closures in 2020 will likely be significantly worse than what we have already experienced in 2019.

When the Administration repeats (as it has done numerous times), that it needs to assist the Cruise Industry, it trips several alarm bells as to why Government officials are seemingly more interested in cruising than retailing. Let’s be clear, cruising is an industry that is much smaller than Retail, employs far less Americans, and they pay significantly less taxes to the Federal Government.

President Trump, if willing, can nod his head and, with a flick of his pen, make our Retail tariff pain go away. What a great stimulus that would be for the American economy! This action would cost the Government nothing, and it is not even remotely considered a bailout.

Remember, approximately 12% of American jobs are in Retail, and as the American consumer spends – it makes up two-thirds of our Economy. If Retail slides backwards, so will America.

Of concern for us at the moment, is that the current thought process trending through this Administration is to provide some assistance for the travel industry and for the Cruise Industry. We have no problem with that (especially with providing assistance to the airlines), but in terms of choices, Ronald Reagan articulated it best when he said “we can’t help everyone, but everyone can help someone.”

Definitely, we want the Administration to pay more attention to Retail and we want them to consider lifting our tariff burden.

Mr. President – Retail stood strong in the Rose Garden last Friday.

Mr. President – Retail will be there for America.

Mr. President – Will the Administration be there for us?

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