Many retailers post gains in October
Published: Wednesday, November 7, 2012 at 1:23 p.m.
Last Modified: Wednesday, November 7, 2012 at 1:23 p.m.
Americans spent briskly in October before Superstorm Sandy hit the Northeast on the tail-end of the month. But the question is whether they're still willing to buy an iPhone for Christmas if they plunked down hundreds on a generator for Sandy?
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. Results were not hurt by the storm because it hit the East Coast on Monday, two days after the period for which retailers were reporting sales ended.
But analysts worry that 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. They fear 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.
For example, Kathleen Webber, a Yardley, Pa. resident, said last Thursday that because of Sandy, she's likely to spend a little less than the $900 she dished out for holiday gifts last year for her children who are ages 12, 13 and 17. The reason? She and her husband have to foot a $1,500 bill for removing two large pine trees that fell in her backyard because of the storm.
"We didn't plan for it," said Webber, a college journalism instructor whose husband is a consultant. "I think we're going to have to have a pretty frugal Christmas."
At a time when Americans already are dealing with a slow economic recovery and uncertainties related to the presidential election, Sandy just gives some of them another reason to cut their spending.
Few retailers offered details last Thursday on how their sales were affected by Sandy. But the storm, which for days disrupted business activity from North Carolina to Maine and caused stores to close due to power outages, flooding and other issues, is expected to cost retailers billions in lost sales.
October's sales reports don't offer a complete picture of the storm's impact. Not only does it exclude sales for the period after Sandy hit the East Coast, it also only includes 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 didn't report sales.