Thursday, April 24, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Stores brace for snow during final shopping days

NEW YORK — Midwesterners aren’t the only ones who could get slammed by the storm that’s expected to bring heavy snow, winds and rain to the middle of the country over the next couple of days. Stores could get hit too.

With sales during the holiday shopping season disappointing so far, the nation’s retailers are depending even more on these final days leading up to Christmas for a boost in business. Retailers are hoping the storm won’t change shoppers’ plans.

Jon Adam, 22, said he’s finished most of his holiday shopping. But Adam, who lives in of Grand Rapids, Mich., was planning to go out this weekend to buy $80 perfume at a specialty store located 35 miles away for his girlfriend. The looming snowstorm, however, is making him rethink that.

“I don’t know if things are going to freeze over,” he said. “We’re all used to snow. But we haven’t had that big snow (storm) this year. So everyone is on edge.”

The first big snowstorm of the season, which began in the Midwest on Thursday, is just the latest challenge facing stores during this holiday shopping season. The period, which runs roughly from November through December, can account for 40 percent of a store’s annual revenue. And the Midwest accounts for about 18 percent of the nation’s retail sales, according to MasterCard Advisors’ SpendingPulse, which tracks spending.

So far this season, sales have been lackluster as shoppers have held back their spending because of worries about the weak U.S. job market and the possibility that a stalemate between Congress and the White House over the U.S. budget could trigger tax increases and spending cuts known as the “fiscal cliff” next year. That would mean less money in shoppers’ pockets.

ShopperTrak, which counts foot traffic and its own proprietary sales numbers from 40,000 retail outlets across the country, slashed its retail sales forecast for the season on Wednesday to an estimated 2.5 percent increase to $257.7 billion. The company had previously predicted a rise of 3.3 percent for the season.

“This comes at a crucial weekend,” said Ken Perkins, president of RetailMetrics, a research firm. “This is the end game. These days are huge as sales have been soft in November and December. They need a strong finish to carry through.”

Most major stores and malls said that local managers are keeping an eye on the weather. Kohl’s closed its Beaver Dam, Wis. store late Thursday. And Dianna Gee, a spokeswoman at Wal-Mart Stores Inc., said that 15 of its nearly 4,000 stores were closed for a few hours Thursday because of the storm. But all but three stores in Kansas, Missouri and Iowa have reopened.

“There’s been no major impact at this point,” Gee said, noting that the affected stores have seen a spike in sales of snacks as shoppers prepared to stay home.

Target, which is watching 46 stores across Iowa, Minnesota and Wisconsin, said it has “prepositioned” inventory such as shovels and winter clothing to areas that are expected to get significant snow. The discounter said in a statement on Thursday that all of its stores are open and that the “goal is to remain open for impacted communities to have access to winter storm essentials.”

Scott Bernhardt, president of Planalytics, which tracks the effect of weather on retailers, said he does not expect the storm to meaningfully affect retail sales because it’s hitting before the weekend begins. He also said the location of the storm will work to stores’ advantage.

“The upper Midwest is going to take some hits, but the areas that are shut down are not Fifth Ave., downtown Atlanta or L.A.,” he said.

In fact, Bernhardt said the storm might actually be good for apparel retailers because shoppers could stock up on sweaters and coats. “It’s beginning to look a lot like Christmas, but this is not going to shut us down,” he said. “And for apparel retailers it’s actually good news.”

At least one mom-and-pop store owner in Indianapolis agrees.

Jennifer Von Deylan, which owns IndySwank clothing and art store, said she isn’t worried about the weather hurting her business.

“It’s Indy. We’re used to snow,” she said. “People are going to get their Christmas gifts. If they have last-minute shopping to do, I think they’re going to do it no matter what.”

The Associated Press

The Associated Press

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