STORM FORCES STORES TO HANG THEIR HOPES ON THE LAST WEEKEND
Byline: David Moin and Mark Tosh
NEW YORK — With billions in business lost this week due to snow, retailers now expect the final weekend before Christmas to be one big grand finale.
Others think it could be one big headache for shoppers.
The question looms whether the weekend will be big enough to make up for lost sales due to the storms Tuesday and Wednesday, and other bad weather days. Business has already been disappointing most of the month, making the final weekend before Christmas even more crucial. “Consumers finally trying to make it to the malls are going to be frustrated at the parking lots, at the cash registers and the wrap desks. And this will crown an otherwise frustrating season,” predicted Isaac Lagnado, of Tactical Retail Monitor.
Janice Suczewski, partner in Deloitte & Touche, said people were very cautious about shopping Tuesday and Wednesday, fearing hazardous road conditions, and sees little pickup today due to extended weather warnings. There’s a chance of flurries today, though some relief is expected, with forecasts calling for partly sunny skies and temperatures in the mid-30s. Between 1 and 3 inches of snow fell in the New York area on Wednesday, adding to 6 to 10 inches that fell Tuesday.
Suczewski’s prediction: “A big weekend for last minute shopping and pent-up demand. Stores will be very crowded. Retailers that staff up should be able to handle the deferred sales and will be in good shape. They have been cutting staffs, but with Christmas falling on a Monday, they may have planned for a big weekend anyhow.”
Kmart is one store bracing for big crowds.
Jeffrey Schnatter, operations manager of Kmart in West Babylon, Long Island, said many employees who couldn’t make it to work during the week due to the weather, and would have taken either Friday, Saturday or Sunday off, have been rescheduled for the weekend.
He also expects all 26 registers will be running 10 to 12 hours, or in some cases about twice as long as normal for Christmas. In addition, there will be more blue light specials.
“I would venture that this will easily be our largest weekend of the year,” Schnatter said. Business on the day before Christmas usually settles down around 4 p.m. or by dinner time, he said. This year, he expects business to slow around 8 p.m.
Malls are trying to make this weekend less arduous for shoppers. Garden State Plaza will offer free gift-wrapping on one package for every shopper, and a second customer service station is being added. Also, there will be parking deck hosts to help shoppers carry bags and extra buses to shuttle people from parking areas to mall entrances.
Hills Department Stores will offer free coffee and donuts and gift wrapping and most units will add two or three shopping hours.
Tactical estimated that general merchandise retailers forfeited $3 billion in sales due to the weather since Thanksgiving. “The disturbing part is that sales lost due to extreme weather this late in the season and this close to people’s travel plans are not made up,” said Lagnado. “A tiny bit gets recouped in catalog, Internet type of selling, but the bulk is forfeited.”
Kmart’s Schnatter said business Wednesday was surprisingly strong, considering the weather, particularly in coats and other seasonal items, and Christmas wrapping. “Where we had snow Tuesday, obviously it was tough,” said Michael Gould, chairman and chief executive officer of Bloomingdale’s. But stores in Florida, Chicago, Skokie, Ill., and Bloomington, Minn. “beat last year’s numbers,” he said.
“A foot of snow during Christmas is like a retailer’s worst nightmare,” said Noel Davidson, owner of the two Bodytalk sportswear and accessory stores in Westport and Avon, Conn. A foot of snow piled up in the Westport area, virtually knocking out business on Wednesday at Bodytalk there, and cutting sales down to 60 percent of anticipated volume on Tuesday. The other Bodytalk unit in Avon, Conn. had “a big day,” Davidson added. Snow hit Avon around 5 p.m., but visited Westport in the early morning.
“The snow is definitely the deciding factor,” Davidson said. There was a bit of positive news on Wednesday, when Deloitte & Touche said it revised upward its forecast on gift spending this season, to $735 per family from $685. The accounting and consulting firm’s poll of 1,000 consumers was first conducted in October and updated last weekend. “People are spending more than they originally intended, but that doesn’t mean that there is new optimism,” Suczewski said. Retailers can pull through at the end, but I wouldn’t turn overly optimistic.”
Consumers polled said tops and other apparel items, such as pants, were highest on their gift list. Books ranked second, followed by picture frames and other home items. Next up was appliances, then computers and related items. “There’s a return to traditional items,” Suczewski said.
Tactical, however, revised its forecast downward. It estimated the cash registers at the nation’s general merchandisers will ring up $95 billion in sales in the Thanksgiving to Christmas period, down from $110 billion estimated earlier in the year. The reasons: poor weather and the poor performances at retail. “Apparel specialty stores, sporting goods stores, and warehouse clubs are in deep negative territory,” Lagnado reported. “Retailers are putting up a brave front, but the snow has really caught them at a particularly bad time.” The Southwest and Southeast have been spared [by the weather] but the Northeast, where snow has wiped out business, “is disproportionately important for Christmas.” He said, “Per capita expenditure of mid-Atlantic and New England are traditionally as much as 15 to 20 percent higher per capita than counterparts in other parts of the country,” Lagnado said.
Lagnado said also there was less credit purchases, with customers spooked by already high installment debt levels. “That’s negative in terms of high-end purchasing, which is not good for retailers,” he said.
Davidson said cash and checks may be more popular gifts this Christmas with people not showing up as much in the stores, potentially lifting sales after Christmas.