Hurricane Sandy: Economy should bounce back analysts say
Though hurricane Sandy will impact dozens of industries and cause billions in damages, experts say the economy should recover quickly with reconstruction after the storm.
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In Pictures Sandy: Chronicle of an unrelenting storm
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"It was supposed to be only a two-hour layover here in Atlanta, Ga., and now it's beginning to be a 28-hour layover until tomorrow," Danielson said.
The nation's big stores are expected to lose billions, and the losses could extend into the crucial holiday shopping season. Sales at department stores, clothing chains, jewelers and other sellers of non-essential goods are expected to suffer the most.
The industry is entering the holiday season, when many retailers collect up to 40 percent of annual revenue. Retailers, excluding restaurants, could lose at least $25 billion in sales this week, estimates Burt Flickinger III of retail consultancy Strategic Resource Group.
Even home improvement chains and grocers that will benefit from shoppers stocking up on emergency supplies before the hurricane and cleaning and repair items afterward could lose sales in the long run if overstretched consumers feel they must scale back.
"If you're spending $400 on a generator, that could hurt discretionary purchases," said Brian Sozzi, chief equities analyst at NBG Productions.
Flickinger now estimates that holiday sales in November and December will rise 2.1 percent over last year instead of the 3.2 percent he had originally predicted.
The storm is affecting small retailers as well as large ones. For many small businesses, opening depended on whether employees lived close by or could work remotely. Businesses vulnerable to wind and water damage and power outages were forced to close. The storm also ruined business trips, meetings and presentations.
At Angelo's Civita Farnese, a restaurant in Providence, R.I., the lunchtime crowd didn't surface as usual on Monday. By 12:30 p.m., barely 10 customers were inside, and owner Bob Antignano had no hope of seeing the 200 to 250 he usually serves for lunch.
"It's a wasted day and it looks like tomorrow probably will be as well," Antignano said.
The loss of two days' revenue will wipe out his profit for the month. He will face losses if the restaurant lost power. He would have to close, and the food in his walk-in refrigerator and freezers could spoil.
The cost to insurers is expected to rival the insured damage from Hurricane Irene last year. Damage from Irene cost insurers roughly $5 billion, according to Sterne, Agee & Leach Research. Because the storm is hitting a highly populous region, with "one of the highest concentrations of wealth in the world," the damages are likely to run into the billions, say analysts at Morgan Stanley.