Snow Could Derail Retailers' Last Hope for the Year

Discussion in 'Wall St. News' started by S2007S, Dec 18, 2009.

  1. S2007S


    As you can see xmas is nothing more than retailers ringing up sales and making their bottom line, just from the title alone you can sense the fear that retailers are having this weekend about the storms touching down on the northeast and how Saturday being the biggest shopping day of the year will bring problems to millions of people that have to go out and spend, spend, spend. Many have forgotten what the holidays are all about, its not about how many gifts you get or the running to the malls, don't get me wrong I love the holidays, its just that I realize what its really about and after that point I find out it loses its definition. I know a few managers who work in retail and all I hear about from them is making their numbers no matter what the conditions are. Those companies pushing those repetitive commercials around the clock from mid October to late December just don't know when to quit, it seems the holidays are forced on us and that the corporations are just out there to grab as much as they can from the consumer during these times of the year, the sad part is that people actually fall for the gimmick year in and year out.

    Snow Could Derail Retailers' Last Hope for the Year
    Published: Friday, 18 Dec 2009 | 3:13 PM ET
    Text Size
    By: Christina Cheddar Berk
    News Editor

    Dreaming of a white Christmas?

    If you are in the Northeast, you just might get your wish. Weather forecasters are calling for a major snowstorm to start in Virginia on Friday and head up the coast to New England by Sunday. The major population centers of the East will receive their heaviest snowfall on Saturday, according to these reports.

    Shoppers in the Northeast may have to brave the elements in order to get their shopping done by Christmas.

    That's likely to be bad news for retailers. About two-thirds of consumers have yet to finish their holiday shopping, and retailers were expecting consumers to hit the stores and get that shopping done this weekend.

    A survey done by UBS and America's Research Group said 40 percent of shoppers wanted to get their holiday shopping completed this weekend. That's up from 19 percent of consumers during the same period last year.

    This Saturday — the last Saturday before this year's Christmas holiday — is often called Super Saturday, a day that is often the biggest shopping day of the year.

    According to Evan Gold, a senior vice president of client services at Planalytics, some of the shopping will shift from Saturday to Sunday, but merchants are not likely to recoup all the lost sales.

    One reason: Stores could lose impulse buys that consumers would otherwise make while they wandered around the mall.

    UBS analyst Roxanne Meyer expects some consumers to shift their buying online. That could be a plus for retailers with a large online presence. (For further comments from Meyer, click here.)

    Meyer cited J. Crew, which rings up 30 percent of its sales online, and Urban Outfitters, which receives 18 percent of its sales online, as two potential beneficiaries of the shift in sales.

    But Gold said he expects that the peak period for online purchases has already passed, because shoppers will be worried that gifts they order will not arrive on time for the holiday.

    Instead, he expects consumers to head to the stores on Sunday or Monday. He suggests retailers in snow-affected areas consider extending sales promotions planned for Saturday or shift more staff to Sunday and Monday in order to meet the shifting customer demand.

    But consumers in those regions shouldn't wait too long after this weekend's storm, as there could be more foul weather headed to the region next week, Gold said.

    It also should be noted that some stores may actually fare better as the snow spurs sales of winter items like sweaters, boots and snowthrowers. And then, there's also the argument that the snow could inspire the holiday spirit and put consumers, who have been cautious in their spending, in a buying mood.

    As an investor, the most important thing to consider is which retail chains have the largest portions of their sales in the Northeast. The table below shows the percentage of average sales that are in the path of the storm, according to Planalytics.

    Percentage of Sales in the Path of the Super Saturday Storm
    Retailer Percentage of Sales
    Bon-Ton 76%
    DSW 44%
    Kohl's 40%
    American Eagle 37%
    Lowe's 36%
    TJ Maxx 36%
    Family Dollar 36%
    Sears 35%
    Macy's 35%
    Target 31%
    Wal-Mart Stores 29%
  2. ipatent


    I think for the most part people have a list and they are going to get what they want to get regardless of weather.

    The snow may shift some sales to Amazon and other online retailers.
  3. pitz


    The demand doesn't exist. People are broke. Snow or not, sales would have been down dramatically. This is just another CNBC-style excuse for an economy that is deep into recession and getting worse, not better.
  4. Have you been to a mall recently?

    At least 8 out of 10 individuals still have jobs that pay. And they're all out shopping. There is hardly any parking space in any of the huge mall parking lots.

    And you under estimate the materialistic DNA embedded inside the average person. He/She will walk through waist high snow to buy chinese made junk. The snow storm warnings are irrelevant.

  5. pitz


    8 out of 10??? Lol if you actually believe the numbers are that high. The few people who have jobs these days -- are afraid that they're going to lose them, or are having their hours cut back. That must be why sales tax receipts are cratering, eh? Of course people will still shop, but instead of buying $500 worth of stuff, they might buy $200 worth of stuff instead.

    Since dramatically less of it was actually shipped to the USA in the past year, dramatically less will actually be purchased.
  6. Who cares about snow storm when you can shop online and pay no sales tax? :D
  7. Illum


    Ugh, I shoveled yesterday, woke up today and its like I never did anything. My neighbors haven't done anything heh. I'm sure they are waiting on the plow, but its gonna be awhile he must be completely swamped, haven't even seen any plows come through. I'm sure sales will be hit. No one is going anywhere. I think people will get what is on their list after work this week, but won't be much time for window shopping. One stop places, like Walmart and Target might actually benefit as people need to get everyone done fast.
  8. ipatent


    State sales tax revenues give the best picture of non-online retail, IMO. You can get this online for most states. I checked a few (PA, FL, TX) out and November year on year revenues are down between 6-10%.