Consumers spent briskly in October before Superstorm Sandy hit the Northeast. But the question is whether they’re still willing to buy an iPhone for Christmas if they plunked down hundreds on a generator in preparation for Sandy?
The storm, which hit the East Coast on Monday, did not appear to negatively impact sales during the month: Twenty-one retailers from club operator Costco to department store Macy’s reported that sales in October through last Saturday were up 5 percent compared with the year-ago period, according to the International Council of Shopping Centers. That beat the trade group’s estimated growth of 3.5 percent to 4.5 percent.
But the strong sales in October could spell trouble for the upcoming holiday shopping season in November and December, a time when many retailers make up to 40 percent of their annual revenue. The fear is that many Americans in some of the nation’s biggest cities who bought generators, bottled water and other emergency and cleanup supplies before and after the storm will be less inclined to spend over the holidays.
Few retailers offered details Thursday on how their sales were affected by Sandy, which for days disrupted business activity in a broad section of the Eastern corridor from North Carolina to Maine and caused some retailers to close stores due to power outages, flooding and other issues.
October’s sales reports don’t offer a complete picture of the storm’s impact. It includes sales up until last Saturday, a few days before Sandy hit the East Coast. And only a handful of retailers representing about 13 percent of the $2.4 trillion U.S. retail industry report monthly results, which are based on revenue at stores opened at least a year. Home improvement chains like Home Depot, the world’s biggest retailer Wal-Mart Stores Inc. and other stores that might have been impacted by the storm don’t report sales.
Michael P. Niemira, chief economist at the international shopping center trade group, said October’s sales reports give a reason to be optimistic, however, there still are “considerable uncertainties.”
“We’ll see any negative impact from Sandy in coming weeks,” he said.
Wal-Mart declined to discuss monthly sales, but the retailer said it’s been rushing deliveries of emergency supplies such as generators and nonperishable foods that don’t need to be refrigerated to its stores. Currently, 12 of its namesake stores, distribution centers and Sam’s Clubs and other facilities remain closed. That’s down from a peak of 300 that were closed on Monday.
Officials at Macy’s, a New York-based chain that generates 8 percent of its annual revenue from its New York City stores, said Thursday that they’re hopeful that the retailer will recoup some or most of its lost sales from the storm during the remainder of the fourth quarter.
Macy’s said sales increased 4.1 percent in October, up from the 2.9 percent increase Wall Street had expected. And Macy’s raised its guidance for revenue at stores opened at least a year for the second half to 4 percent, up from its original estimate of 3.7 percent.
“Business was strong in October,” said Terry J. Lundgren, Macy’s chairman, president and CEO.