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Can Obama bring change to retail outlook?

By Michelle Graff
January 05, 2009

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Washington--Though many Americans were on an emotional high after Barack Obama was elected the nation's first black president, retail jewelers who spoke to National Jeweler were more grounded in their discussions of how his presidency might impact the retail business.

In the short term, they say, Obama's charisma, combined with the sense of certainty that accompanies election results, could create among consumers a sense of optimism and an increased desire to spend.

In the long term, however, many remain skeptical about whether or not having a Democrat in the White House would help.

Indeed, among the retail jewelers who participated in National Jeweler's pre-election online poll--which drew a record 438 participants--45 percent said Republican John McCain would be better for the jewelry business, while 33 percent chose Obama and 17 percent said it made no difference.

Earlier in 2008, Michael Nedler at Sonny's Diamonds and Jewelry in Denver was among those on the fence. But, like many in the red-turned-blue state of Colorado, which voted for President Bush in 2000 and 2004, Nedler opted for Obama in the end.

He says he remains realistic about the economic challenges ahead, acknowledging that the country has serious issues that probably cannot be solved in a four-year term.

But, Nedler says, he is hopeful that Obama can bring positive economic change.

"I think he can if he picks the right people and has the right people around him," he says. "I have more faith in him doing it than John McCain."

At Hug Jewelers in Cincinnati, Steve Hug said in the short term, it is likely that Obama's promises for middle-class tax breaks will put a smile on consumers' faces and have them reaching into their wallets.

"I think that's very possible," he says.

Long term, Hug--whose hotly contested battleground state ended up as a win for Obama--says in his opinion, the economy has nowhere to go but up.

"I think [Obama] might be getting in at the right time and get credit for changing a lot of things," he says.

In California, where Obama took a whopping 61 percent of the vote, Gary Bulfer of Bulfer's Fine Jewelry in La Jolla says he is still "cautiously optimistic."

In the short term, he says, the Obama victory should stimulate consumer spending.

"It probably gives the people in the country, who are going to make the economy run, a more optimistic look at things, some hope for the future," Bulfer says. "I hope that translates into business for everyone."

Bulfer says that on the other hand, Democrats have a reputation for raising taxes, though he'd rather pay more taxes than not make any money at all.

"I feel good about the election," he says.

One retail jeweler who did not feel good on election night was "Diamond" Jim Mills of Pineforest Jewelry in Houston, who says Obama is too left-of-center.

Mills says business "does not trust" Obama as a president and points out that Obama never ran a business himself, making it difficult to have faith in him. His customers in the red state of Texas, where 56 percent voted for McCain, seem to agree.

"Every customer I've got is for McCain," Mills said. "I do not know how this man got into office."

Editor's note: This story first appeared in the December 1, 2008, print edition of National Jeweler.
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