Dive Brief:
-
Some $850 million in economic activity was likely lost in the blizzard this past weekend, with some $275 million alone lost to the hard-hit Washington, DC, and Baltimore areas, according to weather planning and analytics firm Planalytics and reported by the Washington Post.
-
Still, some retailers could have gained from the storm, including those selling the kinds of staples many people stock up on ahead of time and those finally deciding to buy the winter apparel that shoppers left on racks during the warmer-than-usual holiday season, Planalytics says.
-
Most of the economic fallout wasn’t felt by retailers so much as by venues like restaurants, theaters, and hotels, which can’t make up their lost revenues, weather expert Paul Walsh told Retail Dive, who called even such a major storm a likely “wash” for most retailers.
Dive Insight:
While Jonas was quite a destructive storm for the Mid-Atlantic region, leaving damage and even death in its path, retailers by and large will remain unaffected by it. Some retailers were in Jonas's path of destruction, including a New Jersey Trader Joe’s that is scrambling to relocate its employees to other stores after a roof collapse.
And those selling winter apparel and gear and building supplies could see a lift, according to Chris G. Christopher, director of consumer economics at IHS Global Insight.
“We think clothing and accessories stores [specialty stores] will benefit from this storm,” Christopher told Women’s Wear Daily. “We had an unseasonably warm December and clothing tanked. There was excess inventory of clothing and the whole season so far was not in favor of winter weather fashion and clothing. Now you have a reason where people will get out and buy sweaters and boots so this kind of storm does have a benefit for certain segments of consumption after the fact and it could help reduce inventory buildup on clothing that had been noticeable in the third and fourth quarters last year.”
That won’t do much for department stores, though, which face sales challenges that go far beyond the weather, he says.
“We don’t think the storm will have a great impact on department stores,” he told WWD. “Given that they are a downward trajectory overall, we don’t think this is enough to spur department store sales.”
All in all, the challenge for retailers is to be sure they have enough inventory of the things people seek out ahead of a storm, and assess staffing and even closings that ensure their employees’ and customers’ safety, Walsh told Retail Dive.
“Retailers generally don’t make money from a storm like this,” Walsh says. “Their main mission is to stay in stock and be there for their customers, and sustain the demand and make the right decisions.”
Otherwise, retailers must take a long view when it comes to managing logistics in light of weather patterns.
Walsh studies consumer behavior as it relates to weather and works with retailers on how to deal with weather events and weather patterns more generally. The real challenge, he says, is for retailers to use data to neutralize, as much as they can, the impact of weather on sales.
Weather prediction in the short term — the forecast accuracy in terms of timing, duration, and location — has become remarkably accurate, and it’s available even on most smartphones. But that level of accuracy extends to scientists’ ability to assess weather patterns year by year, too, even in the face of climate change, Walsh says. And that in turn can help retailers’ plan their inventories well ahead of time.