US business counts the cost of polar vortex
Financial Times
Retailers and restaurants face $1bn bill, according to one estimate
US business is counting the cost of the deep freeze that has gripped swaths of the country, the latest economic disruption after the government shutdown.
Retailers and restaurants are facing a bill running to almost $1bn, according to one estimate, as Americans hunkered down at home to avoid icy cold that spread from the midwest to the north-east on Thursday. . . .
. . . The overall cost to the economy was expected to be manageable, however, and smaller than an estimated $5bn bill from a polar vortex that hit in 2014.
Fortunately for retailers, this week is among the quietest in the calendar as post-Christmas sales wind down. Weather is also expected to improve in the midwest later on Thursday, further containing the financial fallout.
“But the problem is we’re just coming off the government shutdown, and the last thing retailers need is another distraction,” said Scott Bernhardt, president of business weather intelligence company Planalytics, which calculated the near-$1bn forecast. “When everything freezes up, money stops moving.”
Mr Bernhardt said the main losers would be companies reliant on purchases that consumers would forgo altogether, such as restaurant visits, rather than those that could be put off until the weather improved, such as purchases of cars and other big-ticket items.
Even sales of supposedly defensive products such as tobacco could be hit, Mr Bernhardt said, because of fewer visits to convenience stores.
He added that much of the disruption would be caused by store closures as employees were unable to get to work.
Despite the widespread disruption, there are likely to be some business beneficiaries. Retailers selling winter merchandise would be a “hands down” winner, said Mr Bernhardt, while online sales and drive-through restaurants would also get a boost.
Temperatures in Chicago fell to a low of about minus-30 degrees Celsius, while Minneapolis recorded minus-32, according to the Associated Press.