Home centers among Irene’s retail winners, apparel stores lose out
New York City -- The impact of Hurricane Irene on retail sales is likely to split among category lines: Home-improvement stores selling emergency preparation products and clean-up items are likely to benefit the most from the storm, while apparel retailers and department stores selling non-essential items are likely to take a hit.
Industry analysts noted that big-box stores, drug stores and supermarkets all experienced sales surges prior to Irene’s arrival, but the biggest winners are likely to be home centers. In fact, pre-and-post storm sales may aid same-store sales at Home Depot and Lowe’s each by 1% point in the third quarter, said Stifel, Nicolaus & Co. analyst David Schick in a MarketWatch report.
However, many retailers in the Northeast saw sales drop as they were forced to close doors over the busy late-summer weekend. Apparel retailers and department stores -- and back-to-school sales in general -- were expected to be among the biggest losers. Irene may have reduced apparel retailers’ same- store sales by 0.5% or less for the month as consumers stayed home during the critical back-to-school shopping season, Jennifer Davis, an analyst at Lazard Capital Markets, noted in an e-mail, Bloomberg reported. Supermarkets, drug stores and big-box retailers likely benefited, she said.
The Home Depot shipped more than 1,000 truckloads of extra storm-related supplies, spokesman Stephen Holmes said in the Bloomberg report. Chainsaws, cleaning supplies and vacuums are now in demand as people shifted their focus from storm preparation to clean-up, Holmes said.
Similarly, Lowe’s Cos. shipped more than 1,000 extra truckloads of flashlights, batteries and generators to East Coast stores, Bloomberg reported.
As of 9 a.m. Monday, Wal-Mart said it had no reports of significant damage to any of its nearly 600 facilities located along the East Coast. At peak, there were 297 stores and clubs that were closed due to the hurricane. As the storm has moved north, it has reopened 259 of those stores and clubs.
Irene’s total damage, including uninsured losses, could range from $5 billion to $7 billion, he said. That stands in contrast to Hurricane Katrina, which reportedly cost more than $70 billion in insured losses alone.
Since Hurricane Katrina, the Federal Emergency Management Agency (FEMA) has begun studying ways to work with the private sector, including national retailers, during emergencies. For an interesting look at how The Home Depot and Wal-Mart prepared for the storm, go to npr.org/2011/08/26/139941596/big-box-stores-hurricane-prep-starts-early?ps=cprs