Snow Could Derail Retailers' Last Hope for the Year
Dreaming of a white Christmas?
If you are in the Northeast, you just might get your wish. Weather forecasters are calling for a major snowstorm to start in Virginia on Friday and head up the coast to New England by Sunday. The major population centers of the East will receive their heaviest snowfall on Saturday, according to these reports.
That's likely to be bad news for retailers. About two-thirds of consumers have yet to finish their holiday shopping, and retailers were expecting consumers to hit the stores and get that shopping done this weekend.
A survey done by UBS and America's Research Group said 40 percent of shoppers wanted to get their holiday shopping completed this weekend. That's up from 19 percent of consumers during the same period last year.
This Saturday — the last Saturday before this year's Christmas holiday — is often called Super Saturday, a day that is often the biggest shopping day of the year.
According to Evan Gold, a senior vice president of client services at Planalytics, some of the shopping will shift from Saturday to Sunday, but merchants are not likely to recoup all the lost sales.
One reason: Stores could lose impulse buys that consumers would otherwise make while they wandered around the mall.
UBS analyst Roxanne Meyer expects some consumers to shift their buying online. That could be a plus for retailers with a large online presence.(For further comments from Meyer, click here.)
Meyer cited J. Crew, which rings up 30 percent of its sales online, and Urban Outfitters, which receives 18 percent of its sales online, as two potential beneficiaries of the shift in sales.
But Gold said he expects that the peak period for online purchases has already passed, because shoppers will be worried that gifts they order will not arrive on time for the holiday.
Instead, he expects consumers to head to the stores on Sunday or Monday. He suggests retailers in snow-affected areas consider extending sales promotions planned for Saturday or shift more staff to Sunday and Monday in order to meet the shifting customer demand.
But consumers in those regions shouldn't wait too long after this weekend's storm, as there could be more foul weather headed to the region next week, Gold said.
It also should be noted that some stores may actually fare better as the snow spurs sales of winter items like sweaters, boots and snowthrowers. And then, there's also the argument that the snow could inspire the holiday spirit and put consumers, who have been cautious in their spending, in a buying mood.
As an investor, the most important thing to consider is which retail chains have the largest portions of their sales in the Northeast. The table below shows the percentage of average sales that are in the path of the storm, according to Planalytics.
Percentage of Sales in the Path of the Super Saturday Storm
|Retailer||Percentage of Sales|
More from CNBC.com:
- Last-Minute Shopping? There's an App for That
- Winners and Losers this Holiday in Electronics
- Pociask: The Bad News About the Economy Is Good News for Shoppers
Questions? Comments? Email us at email@example.com