Hurricane Sandy clean-up and replacement spending is expected to cut deeply into the holiday budgets of those impacted by the devastating storm. Christmas shopping is likely the furthest thing from the minds of those who do not even know if their homes are still standing. Retail forecasters are quick to note that Black Friday is just around the corner, and, if Hurricane Irene trends hold true, Santa may be carrying a lot lighter bag this year.
The short term economic growth experienced by some stores in Hurricane Sandy’s path is not expected to last. While the shelves of warehouse clubs, hardware stores, and supermarkets are nearly bare after residents stocked up in preparation for the storm, malls have become ghost towns. Restaurants and movie theaters in the region are expected to lose billions this week, according to CNN Money.
Costello’s Ace Hardware President Michael Costello had this to say during an interview with the New York Post:
“There’s a frenzy out there. Business is only limited by the amount of product you can get into the store.”
Once the debris from Hurricane Sandy is removed, Costello believes a second wave of shoppers seeking more supplies and power generators. He operates 19 stores in the Long Island area.
Planalytics, a weather consulting firm, predicts a long list of retailer losers this Christmas shopping season. Company president Scott Bernhardt forecasted that risks for retailers selling toys, jewelry, sporting goods, and apparel will all be impacted by Hurricane Sandy expenses. Planalytics notes as much as a full point off the anticipated holiday sales could occur.
Mesirow Financial economist Diane Swonk believes home repairs in the coming weeks will be a key factor in the size of the footprint Hurricane Sandy will have on Christmas sales.