Rate this Content (5 Being the Best)
Superstorm Sandy Shuts Hundreds of Big Box Stores
By Adam Blair
Besides the general devastation wrought by Hurricane Sandy, including at least 15 dead in the U.S. and millions of people without power, the "Frankenstorm" has also forced major retailers to close hundreds of their stores, along with thousands of smaller retailers. Walmart, Target, Lowe's, Sears, Macy's and Apple have each closed hundreds of stores in states stretching from Virginia to Maine, with most closures concentrated in the mid-Atlantic states of New York, New Jersey, Delaware, Connecticut and Pennsylvania.
Store closures as of October 30. List is based on published reports and information on selected retailer websites:
Best Buy 100+
Foot Locker 200
Ascena Retail Group 500
Estimates of the storm's total economic impact range widely at this point. USA Today quotes Peter Morici, an economics professor at the University of Maryland's Smith School of Business, as estimating Sandy will result in $35 to $45 billion in total losses. However, Eqecat, which does catastrophic risk models, projects $10 to $20 billion in damages, about half of which will be insured.
However, despite the immediate impact of shuttered stores, the storm's economic impact on retail overall is likely to be relatively mild. One reason is that the storm hit between the end of the back-to-school season and before the serious ramp-up to the holiday season. Joel Bines, managing director of AlixPartners' retail practice, told Reuters that the storm's "timing is far enough away from any major holiday, so it's unlikely to have a meaningful impact on overall holiday sales unless there's a catastrophe of Hurricane Katrina proportions."
The seasonal losers will be retailers that had counted on last-minute sales of Halloween items. The National Retail Federation had estimated that U.S. consumers would spend a total of $8 billion on the holiday this year, up from $6.9 billion in 2011, according to a report from The Wall Street Journal.
Among retailers benefiting from the storm are food stores and those selling emergency supplies. A CNBC report quoted Diane Swonk, chief economist at Mesirow Financial, as seeing a spending boost prior to the storm as people stocked up on food, water, batteries and other essentials. In addition, she foresees "increased spending at hardware and home stores, once damages from the storm are assessed and repairs get underway. That spending could borrow a bit from traditional holiday sales, depending on how much insurance is paid on those claims," said Swonk.
Citigroup analyst Oliver Chen estimated that shopping could be down by as much as 40% for the week in affected areas, with November comp store sales down by as much as 2-3%. But stores selling food, emergency supplies and other staples should see an uptick in traffic and sales, according to the New York Times.
A number of retailers did send e-mails and text messages to customers prior to the storm encouraging them to stock up on supplies and offering one-day sales and free shipping, though apparently few retailers labeled these "Storm Sales" to avoid seeming to take advantage of the disaster. However, independent toy retailer Learning Express, anticipating that kids would be trapped in the house, sent promotions for new games and crafts, enough to "spare a parent's sanity," according to a CNBC report.
Current rating: 3.2 (6 ratings)