Hurricane Dorian to cost retailers $1.5 billion and threaten back to school sales
CNBC
By: Jasmine Wu
KEY POINTS:
•Consumer spending is expected to decline as much as $1.5 billion, according to data analytics firm Planalytics.
•Foot traffic at apparel stores is expected to fall 25%, while visits to outlet centers will decline 32%. Restaurant traffic is expected to decrease 14%.
•Home centers, grocery chains and convenience stores are going to see surges as consumers stock up on emergency necessities.
Retailers in the southeast can expect Hurricane Dorian to threaten the typical boosts they see from shoppers on the tails of Labor Day weekend and the back to school season.
Instead, that spending will go to grocery store chains and home improvement centers like Lowe’s and Home Depot as consumers stock up on necessities. Mass merchants like Target and Walmart will also see a boost, especially because consumers might turn to their recently rolled out same-day or next-day delivery services to purchase goods.
. . . Consumer spending is expected to decline as much as $1.5 billion, according to data analytics firm Planalytics. That factors in the gains from the home centers, grocery chains and convenience stores as consumers stock up emergency necessities like plywood, flashlights, water bottles or canned goods.
Foot traffic at apparel stores could fall 25% while visits to outlet centers will decline 32%, Planalytics estimated. Restaurant traffic is expected to decrease 14%.
Evan Gold, executive vice president at Planalytics, said companies with a large presence in the southeast are particularly vulnerable, such as BJ’s Wholesale, Dillard’s, Disney, and supermarket chain Publix.
Dillard’s has 42 stores in Florida, 12 in Georgia, and 21 in the Carolinas. Publix has 831 stores in Florida, 190 in Georgia, and 110 in North and South Carolina, according to its website. As of noon Wednesday, it said it was closing 115 stores. Forty-six of Walmart’s stores were closed due to the storm as of the same time.
Disney announced abbreviated schedules for parks in the Walt Disney World Resort on Monday and Tuesday before the storm.
“Those are hours they’re not going to get back,” said Gold.
Gold also noted that there are a large number of ports in the Carolinas, which retailers rely on to receive goods.
“August and early September is a time when a lot of the holiday goods start getting shipped in, and those ports are very busy,” he said. “The storm is so large that I’m sure there will be some ripple effect. I’m not sure to the average consumer that they’re going to significantly notice that goods may or may not be on the shelves come Christmas time but I’m sure there’s disruption happening now.”