Stores seeing boom then bust from storm
NEW YORK — Hurricane Sandy may be delivering early holiday blues for retailers.
While long lines formed over the weekend at supermarkets, discounters and home-improvement retailers like Home Depot Inc. and Lowe’s Cos. as consumers stocked up on essentials and storm-related supplies, many retailers began shutting their doors as early as Sunday and remained closed on Monday.
In New York, for instance, stores closed their doors Sunday afternoon ahead of the city’s mass-transit shutdown.
The storm isn’t good news for retailers, which are bracing for what’s already expected to be an overall disappointing October. Warmer-than-average weather was estimated to have hurt demand for cold-weather merchandise. Sandy’s impact will be felt in retailers’ November sales in the critical holiday fourth quarter because the past Saturday marked the end of most retailers’ fiscal October. Retailers are scheduled to report their October comparable sales results on Thursday.
“The overall impact is going to be a negative for November retail sales with store closings and consumers hunkering down at home during the storm,” Krissy Klinger, a senior international business meteorologist at weather consulting firm Weather Trends International, told MarketWatch.
“Mall-based stores will probably take a big hit as consumers focused on discount retailers (like Wal-Mart and Target) and home centers (including Lowe’s and Home Depot), basically steering shoppers clear of the malls.”
Still, Klinger said while discount retailers will have seen a surge in traffic and sales prior to the storm, they also face a few days of reduced store traffic or store closings and will lose a day or two of sales, especially with lost Halloween sales, leading to “an overall negative” impact.
In New York, Mayor Michael Bloomberg announced that the mass transit shutdown would likely continue into Tuesday. That will translate to continued store closings.
Home-improvement retailers like Home Depot and Lowe’s may be the only segment with a net positive impact as they could see a “small boost” from Sandy overall with consumers stocking up on emergency supplies prior to the storm and then revisiting the home centers to fix any damage done to their homes, offsetting any negative impact of store closings, Klinger said.
“The overall increase in customer traffic due to consumers dealing with the storm is likely higher than the ‘normal’ weekly crowd at the home centers,” the meteorologist said.
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As of Monday morning, 12 Home Depot stores were shut in the New York and New Jersey area while other stores that are open have extended hours with truckloads arriving at stores Monday with new supplies to restock the shelves, spokeswoman Meghan King said, adding more than 300 Home Depot stores could be affected by the hurricane.
Shoppers have been buying plywood to cover windows, fasteners to secure plywood, hurricane shutters, flashlights and batteries, water, ice chests and battery-powered radios, she said.
At Home Depot’s rival Lowe’s, 62 store closures were scheduled for Delaware, Maryland, New Jersey and New York, spokesman Steve Salazar said Monday, adding as many as 200 stores are in the affected zone. Lowe’s has sent more than 400 truckloads of generators and water directly to its stores in the past four days.
At Sears Holdings Corp., tools and generators were flying off the shelves at the Sears chain while consumers were buying perishable items like food and water as well as blankets at Kmart, spokesman Tom Aiello said. By early Monday afternoon, the company shut 115 stores, with some closings the result of road closures and power outages.
Target, which has more than 200 stores in the affected zone, shut 14 stores as of Monday morning, mostly in New York and New Jersey, and predicted additional closures Monday and into Tuesday and Wednesday, spokeswoman Jessica Deede said, adding 16 stores in Virginia were to close Monday afternoon. She said the retailer also has been restocking shelves with essential items.
Wal-Mart said Friday about 800 of the company’s stores and Sam’s Clubs could be affected by the storm. As of Monday afternoon, 88 of its stores were closed, mostly in Connecticut, New Jersey, New York, Pennsylvania and Delaware, the company said on its website.
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Victoria’s Secret parent Limited Brands Inc. closed 160 stores on Monday, spokeswoman Tammy Roberts Myers said.
Macy’s shut about 130 of its namesake and Bloomingdale’s stores in areas from Washington, D.C. up to southern Connecticut and closed its Manhattan store, said spokesman Jim Sluzewski, adding Macy’s will continue to monitor the situation store-by-store and make adjustments as conditions change.
“Such events displace demand, but do not destroy demand, displacing demand temporally,” said Craig Johnson of consultancy Customer Growth Partners, adding the advance sales might have boosted third-quarter comparable sales at Lowe’s and Home Depot by up to 0.4 percentage point in an otherwise-slow quarter.
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