Can Christmas shopping sales recover from snowstorm?

Retailers took a hit on Christmas shopping sales because of the snowstorm, though online sales surged. The storm also took a financial toll on towns that had to dig into their snowplowing budget early.

Matt Slocum/AP
Shoppers leave a Philadelphia Best Buy store during a snow storm on Saturday.

The bill from the blizzard of ’09 is racking up into the billions of dollars.

Airlines had to cancel flights and now are struggling to find seats for stranded passengers on nearly-full holiday flights. Merchants, such as booksellers Borders, are extending hours to get snow-bound shoppers into their stores. And financially hard-pressed cities are bemoaning the expense of plowing a foot or more of the white stuff off their roads.

“You could not have chosen a worse day for the storm to hit,” says economist Joel Naroff of Naroff Economic Advisors in Holland, Pa.

The Saturday before Christmas – just when the storm was starting to pelt the mid-Atlantic states – is the busiest shopping day of the year. Malls and stores are usually selling their wares at a frantic pace.

“The only saving grace this year is that the Saturday before Christmas is almost a week before Christmas” says Mr. Naroff. “There is at least a chance to recoup a little bit of the losses that occurred.”

Can retail losses be made up?

The unrecoverable losses from the storm came to about $2 billion, according to a preliminary estimate from Planalytics, a business weather forecasting service.

“The industry as a whole will not be able to completely make up for so many lost shopping hours in so many heavily-populated centers,” writes Scott Bernhardt, chief operating officer of the Wayne, Pa. service, in an e-mail.

In Boston, for example, upscale shoe store Thom Brown said sales on Sunday (when the storm hit that city) were a dud. According to a store manager, Isaiah Bond, it only did $90 in sales compared to $1,100 last year the same day. But he has higher hopes for the post-Christmas period when people buy shoes for New Year’s Eve.

Although many stores lost sales, some recouped losses with their online business. That was the case at ‘47 on Newbury Street, Boston, which sells upscale "vintage-inspired sports and college apparel." Assistant manager Lauren Ibey said strong sales on the store’s newly-opened Website helped mitigate the lack of people in the store on Sunday.

Despite the losses, the National Retail Federation (NRF), a lobbying group, is sticking to its pre-storm estimate that holiday sales will decline about 1 percent this year. “There could be a regional effect but nationally it won’t move the needle,” says Scott Krugman, a spokesman for NRF in Washington, D.C.

Canceled flights

The storm also wrecked havoc with the airline industry. According to some reports, airlines in the New York region cancelled 1,200 flights.

“We are now in recovery mode, working to accommodate some of the 41 million people who travel during the holiday period,” says David Castelveter, a spokesman for the Air Transport Association (ATA), which represents the airline industry, in Washington.

“But, you can be rest assured most of the flights will be near capacity,” he adds.

On Monday, the load factor was 94.2 percent at Jet Blue, which cancelled 488 flights or 22 percent of their departures between Friday and Sunday, says spokesman Bryan Baldwin in New York. Since flights are normally full this time of year, he says, some flyers might have had to wait a day or two to get a flight.

Mr. Castelveter says that when he drove past Washington’s Ronald Reagan Airport Monday morning, the line to check baggage with the skycaps stretched from one end of the terminal to the other.

“I am advising people to get to the airport two hours early,” he says.

For towns, an early snowplowing bill

The big storm is also expensive for communities that have to push snow off the highways.

“It’s really nice for those people who do the snowplowing,” says Naroff. “But, for the cities and towns it’s as bad as it can get – they probably used up a significant portion of their snow removal budgets early in the season.”

Unfortunately, the snow season is just beginning. Another storm is expected on Christmas Eve. Most of it will be rain for the northeast though some altitudes may see ice storms. And, Planalytics’ Mr. Bernhardt says, that will be just a forerunner of the winter.

“Things have set up for a continuation of the conveyor belt of storms the next couple of weeks,” he says.


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