By and  on September 2, 2005

NEW YORK — In the wake of Katrina, retailers are questioning how business will pan out in the months ahead, even as they stepped up efforts to locate employees, provide relief and reopen stores in affected Gulf Coast areas.

Consumer panic over the price and availability of gas has spread over parts of the country, potentially impacting broader shopping patterns.

While soaring gas prices siphon discretionary income — primarily from lower- and middle-income families shopping discounters and mass merchants — analysts have said the storm's devastation could ultimately lead to a spending boom in the third and fourth quarters and into next year, as consumers seek to replace lost home furnishings and apparel, and buy up materials to repair their homes, benefiting such chains as The Home Depot, Wal-Mart and Lowe's.

Wal-Mart added, "In recovery from Katrina, our primary focus is to take care of our associates and our customers. We had approximately 126 facilities impacted initially, but have reopened more than 80 of those facilities, leaving approximately 1 percent of our U.S. locations closed."

Big Lots said 26 stores remained closed Thursday, compared with 29 on Wednesday, while Abercrombie still had four stores closed, one in Biloxi, Miss., and three in New Orleans. "The situation continues to change," said the Big Lots spokeswoman, noting the store reopenings should continue.

"We have no idea when our stores will reopen," said Lennox. "It's a complete disaster. Fortunately, all our associates are accounted for."

Michael Niemira, chief economist and director of research for the International Council of Shopping Centers, said there could be some "very near impact" where retailers have to divert some merchandise that would have gone through New Orleans or Mobile. Still, he was more concerned about the price of gas and energy directly having a national effect on retailing.

But Lennox said, "From our perspective, I don't think rising oil prices have a negative impact on our consumers," which are primarily of high school and college age. "They're generally insulated," from such concerns as prices at the pump, whereas their parents might be more worried and budget-oriented, Lennox noted.

At least in the short term, the jump in gas prices will likely affect consumers' ability to spend on nonessentials. Possibly more important for now is the impact the price hikes will have on consumer psychology, said one analyst. "Until things shake out, [high gas prices] will overwhelm any kind of sustenance in the consumer until we see prices come back down," said John Pinto of investment partnership Brightleaf Partners LP in Durham, N.C."Whether it's perception or reality, that's unclear. But it's clearly leaning more toward the panic side," Pinto said of the gas price upswing. Parts of North Carolina, he added, experienced panic conditions on Thursday with long lines at gas stations, some of which have run out of gas altogether.

Meanwhile, more retailers joined the relief effort. Pathmark Stores said customers through Sept. 8 may contribute to the Hurricane Katrina Relief Fund at any Pathmark with the proceeds sent to the American Red Cross. Pathmark will also contribute to the same fund. In addition, Pathmark will donate water and cleaning disinfectant to the effort.

Sears Holdings said for residents of Louisiana, Mississippi and Alabama devastated by Hurricane Katrina, it is donating nearly $500,000 in merchandise and gift cards to the American Red Cross, along with up to $500,000 in matching funds to help families hardest hit by the storm.

To unlock this article, subscribe to WWD below.

load comments
blog comments powered by Disqus