Irene boosts some sales, hurts others
AP
Waves caused by Hurricane Irene flood Topsail Island Friday, Aug. 26, 2011, in Surf City, N.C. Irene has the potential to cause billions of dollars in damage all along a densely populated arc that includes Washington, Baltimore, Philadelphia, New York, Boston and beyond. At least 65 million people could be affected. (AP Photo/The Wilmington Star-News, Matt Born)
AP
A rough surf is seen as Hurricane Irene moves up the eastern coast, Friday, Aug. 26, 2011 in Neptune Beach, Fla. Irene has the potential to cause billions of dollars in damage all along a densely populated arc that includes Washington, Baltimore, Philadelphia, New York, Boston and beyond. At least 65 million people could be affected. (AP Photo/The Florida Times-Union, Jon M. Fletcher)
This satellite image provided by NOAA and taken at 12:45 GMT Friday Aug. 26, 2011 shows Hurricane Irene as it moves northward along the U.S. eastern coastline with 110 mph sustained winds. Hurricane Irene began lashing the East Coast with rain Friday ahead of a weekend of violent weather that was almost certain to heap punishment on a vast stretch of shoreline from the Carolinas to Massachusetts. (AP Photo/NOAA)
Associated Press
NEW YORK
It’s the not-so-quiet before the storm.
People up and down the Eastern Seaboard are crowding hardware stores, grocers and big-box retailers such as Home Depot and Wal-Mart to pick up $599 generators, bottled water and flashlights in preparation for Hurricane Irene, which is expected to hit landfall by today.
At Ace Hardware in Elizabeth City, N.C., near where the hurricane is expected to land, business Thursday was triple what it is normally on that day. The ShopRite in West Orange, N.J., was chaotic Friday afternoon, with cars honking as people waited to get into the parking lot. The Ace Hardware in Nags Head, N.C., sold out of portable generators by Thursday.
Some retailers are getting a boost in business, but extreme weather such as hurricanes is damaging to the retail sector as a whole. And this one is coming in the thick of the critical back-to-school shopping weekend, a time when some merchants make up to 25 percent of their annual revenue. In fact, weather research firm Planalytics estimates that Irene will stop 80 million shoppers from hitting the malls this weekend. At the same time, demand for hurricane-related supplies is giving some retailers an unexpected boost that will likely continue as people deal with the cleanup in Irene’s aftermath.
In a note to clients Thursday, Citigroup analysts Deborah Weinswig and Tina Hwang said they expect department stores will suffer with shoppers locked up inside their homes, while discount stores, supermarkets and home-improvement stores will get a rush of customers eager to stock up on canned foods, batteries and survival gear.
To meet the increased demand, many big retailers such as Home Depot, Lowes and Wal-Mart have assembled disaster teams. “Preparing for a hurricane is all about the supply chain. Making sure you got the right products at the right time that consumers are looking for,” said Sherif Mityas, a partner in the retail practice at A.T. Kearney. “They’re wired into how the storm is affecting the communities around the stores.”
Wal-Mart Stores Inc., the world’s largest retailer, has its own staff meteorologist, who can evaluate the weather data and analyze how it will impact its stores and workers. The discounter also can forecast what shoppers are looking for before a hurricane strikes —— and in its aftermath —— by using predictive modeling that studies past spending behavior.
Mark Cooper, senior director of Wal-Mart’s emergency management team, said the retailer is working with the Federal Emergency Management Agency to ensure that stores have all the items on its list for emergency preparedness kits. The list, which is on www.ready.gov, includes batteries and cleaning supplies.