Merchants hope for sales avalanche
February 24, 2003,
Retailers last week extended their Presidents' Day sales in an attempt to determine how much of the original snowed-under event might still be salvaged. But expected heavy weekend rains over large sections of the Northeast, along with local flooding caused by snow clogged storm drains, conspired to potentially rob their cash drawers yet again.
With snow measuring more than two feet in some areas, most consumers couldn't fight their way beyond their front doors, let alone get out to shop last Monday. Dozens of major malls and hundreds of stores simply closed — not just because there were no shoppers, but because their employees couldn't get into work, either.
The blizzard cost U.S. retail sales an estimated $422 million in the Northeast for the Saturday to Monday weekend, according to ShopperTrak's National Retail Sales Estimate, denying retailers even a little respite from the now familiar litany of woes they have recently battled, beginning with the troubled economy.
Adding insult to injury was the very expensive waste of advertising — tens of millions of dollars — directed at the holiday weekend events.
Last year's Presidents' Day weekend accounted for 13.1 percent of total sales for the calendar month, according to NRSE.
"This suggests that the snowstorm pared year-over-year total GAFO sales growth by about three quarters of a percentage point for the month, making it difficult for the industry to recoup those lost February sales," said Michael Niemira, lead consultant for the NRSE.
The holiday followed a 1.5 percent week-over-week gain for the Valentine's Day week ending Feb. 15, the NRSE found, and a 9.3 percent year-over-year gain, the strongest year-over-year sales performance since Aug. 31.
"Presidents' Day is one of three or four three-day weekends retailers have in a given year," said Ellen Tolley, manager of media relations for the National Retail Federation. Headquartered in Washington, the NRF itself was closed earlier last week due to the blizzard. The holiday can be important to some retailers, Tolley added, while others realize few, if any gains.
Planalytics, a company that forecasts weather-driven changes in supply, demand and prices, predicted that department stores, specialty stores and mass merchants would be the retail losers for the month, while grocery and convenience stores, along with video rental stores, would be the winners.
JCPenney and Federated Department Stores made particular mention of the storm's impact in their weekly recorded sales calls. JCPenney said its department stores were trending on plan for the month, while Federated said it hoped to get back on track by the end of the month.
For determined optimists, there were some positives. NRF's Tolley said retailers were better prepared with less clearance merchandise, and consumers were ready to shop this past weekend.
Presidents' Day has been traditionally used to try to move leftover winter merchandise, and that's not much of a concern this year, Tolley explained.
"The good news in all of this is that retailers have done an amazing job of managing their inventories," she said.
"There are a lot of stir-crazy Americans out there."
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