U.S. Retailers Hurt as Snowstorm Thwarts Shoppers

U.S. retailers expecting to ring up sales in the days after Christmas may have to intensify discounts after a snowstorm slammed the East Coast yesterday, disrupting one of the busiest shopping days of the year.

Parts of New York and New Jersey got as much as two feet of snow over the past few days, keeping many shoppers at home. Spending may shift into January, according to Marshal Cohen, chief industry analyst at NPD Group Inc., a research firm based in Port Washington, New York.

“It’s like throwing a party and nobody comes because the focus has gone from post-holiday shopping to post-holiday travel,” Cohen said in a telephone interview yesterday. “Look for sales to be repeated by retailers. They’re going to be more aggressive. They’ve got to throw another party.”

The day after Christmas is one of the five busiest shopping days of the year, and it may take retailers two weeks to capture sales lost yesterday, Cohen said. At the same time, shoppers may lose their enthusiasm as the holiday season wanes, he said.

Some shoppers soldiered on to get deals. Ten minutes before opening time at 10 a.m. today, an employee at Bloomingdale’s flagship Manhattan store let 30 or so early-bird shoppers into a heated vestibule so they could warm up.

“It’s Christmas, so that means we’re shopping,” said Ed Hutlas, 68, an engineer from Dallas visiting the city for the holidays, who stood inside the vestibule with his son and granddaughter. Hutlas said his first purchase would be a new heavy winter coat for his granddaughter.

Storm’s Benefits

Bloomingdale’s may not be the only one to benefit. Snow shovels, ice melt and gas-powered snow blowers “are in high demand” at Lowe’s Cos. Inc. stores from eastern Pennsylvania through Maine, Karen Cobb, a spokeswoman for the second-largest U.S. home improvement chain, said today. Home Depot Inc. was shipping additional blowers and other snow-related products to stores from North Carolina to Maine, Ron DeFeo, a spokesman for the Atlanta-based company, said today.

The Standard & Poor’s 500 Retailing Index dropped 1.4 points to 510.43 at 1:24 p.m. New York time. The index had gained 25 percent this year before today, compared with a 13 percent increase for the S&P 500.

Earlier this month, the National Retail Federation boosted its holiday retail sales forecast by 1 percentage point, to an increase of 3.3 percent. Today, MasterCard Advisors’ SpendingPulse, a Purchase, New York-based research firm, is expected to release sales numbers for the entire holiday season.

Consumer Confidence

Consumer confidence rose in December to the highest level in six months as more Americans, whose purchases account for about 70 percent of the U.S. economy, put faith in improving job and income prospects.

Ultimately, the storm may have little impact on retailers, according to Craig Johnson, president of Customer Growth Partners, a retail consulting firm based in New Canaan, Connecticut.

“Anybody who wanted to return something yesterday in New York either went early or will do it later today or tomorrow,” Johnson said in an e-mail. “Anybody wanting to redeem gift cards, which don’t expire for at least 2 years, can do it either later or online.”

The storm also likely will give online sales “a slight bump” yesterday and today, said Johnson.

Grappling With Storm

In the meantime, retailers and shoppers were grappling with the storm and its immediate aftermath. Macy’s Inc., the second- largest department-store chain, closed more than 70 stores early yesterday, mostly from 6 p.m. to 7 p.m., Jim Sluzewski, a spokesman for the Cincinnati-based retailer, said today.

At 9:30 a.m. yesterday, only two cars had pulled into the parking lot of a Sears Holdings Corp. store in Greensboro, North Carolina, even though the retailer had advertised early-bird discounts of up to 60 percent on clothing and 30 percent on refrigerators and washing machines.

“My wife wasn’t happy when I decided to come out,” said Michael Scarlett, shopping at the Hoffman Estates, Illinois- based chain after three inches of snow had accumulated overnight. He planned to pick up an Android tablet computer he’d ordered online and return home.

At 10:30 a.m, the Apple Inc. store in Greensboro had 17 customers and 17 red-shirted employees, including four at the front window watching a yellow bulldozer push snow into a pile in the parking lot. At one Macy’s store, the cosmetics counters had no customers shortly before 11 a.m.

‘Deserted’

Up the East Coast, in Whitehall, Pennsylvania, shopper Camille Qualtere was surprised to find the Lehigh Valley Mall “deserted.”

“We thought, ‘Is the mall closed?’” said Qualtere, 54, who took her two daughters to return unwanted gifts and shop for discounted clothes at Macy’s before the storm started. “I didn’t hear about the snow because I was cooking all day yesterday. My daughter just told me about it.”

Consumers may temper their spending if the storm’s aftermath stalls shopping for several days and the frugality of New Year’s resolutions kicks in, said Michael Dart, the San Francisco-based head of private equity at the New York consulting firm Kurt Salmon Associates.

“You’re moving into an environment where the consumer is going to be pulling back,” Dart said yesterday. “Retailers don’t want to lose too many of those shopping days. If it’s just today, it’s not a big deal. But the longer the weather remains bad, it becomes problematic for retailers.”

New York City had 18 to 20 inches (46 to 51 centimeters) of snow by 7:30 a.m. local time today as the storm’s center shifted north and east, commercial forecaster AccuWeather said. The National Weather Service issued blizzard warnings for Boston and into Maine. In New York, service on several transit lines was suspended, pushing some people into stores -- although shopping wasn’t their first priority.

“I’m here to keep warm, it’s so cold, my hands are numb,” Marcia Alleyne, a 21-year-old from Queens, said in a Forever 21 store in New York. “There are no buses running -- I’m just trying to kill as much time as I can.”

To contact the reporters on this story: Chris Burritt in Greensboro, North Carolina, at 1348 or cburritt@bloomberg.net; Burt Helm in New York at bhelm3@bloomberg.net.

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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