Snowstorm Delays Post-Christmas Action

Discussion
Dec 28, 2010
Tom Ryan

By Tom Ryan

The blizzard that struck the Northeast on the day after Christmas,
typically the third or fourth busiest shopping day of the year, left many industry
prognosticators speculating on whether greater markdowns would be forthcoming
for the retail industry.

Parts of New York and New Jersey received as much as
two feet of snow, keeping many shoppers at home. Several
stores closed early Sunday evening as weather conditions worsened and delayed
openings on Monday.

The day after Christmas is largely known for returns but stores put additional
merchandise on sale to drive incremental purchases. They also hope clearance
sales will be scooped up during the day to avoid the need for steeper promotions
later on.

Speaking to the Wall Street Journal, Richard Jaffe, an analyst
at Stifel Nicolaus, predicted that Sunday’s major snowstorm could hurt December
same-store sales by 1 percent to 1.5 percent. The last week of December contributes
about 15 percent to 20 percent of overall December sales, and just under one-third
of national retail sales take place in the snow-hit areas, Mr. Jaffe said.

Marshal
Cohen, chief industry analyst at NPD Group, told Bloomberg News that
promotions may be extended into January.

"It’s like throwing a party and
nobody comes because the focus has gone from post-holiday shopping to post-holiday
travel," said Mr. Cohen. "Look
for sales to be repeated by retailers. They’re going to be more aggressive.
They’ve got to throw another party."

On the positive side, the storm’s
arrival in the early afternoon at least led to strong morning sales. Craig
Johnson, president of Customer Growth Partners, also told Bloomberg that
customers will likely just come back over the next few days to return merchandise
or redeem gift cards.

Pete Nordstrom, president of merchandising at Nordstrom
Inc. told the Journal said
he wasn’t overly concerned about the blizzard although the day after Christmas
generally ranks as one of the retailer’s top-10 days.

"It seems like there’s always some bad weather somewhere," Mr. Nordstrom
said. "We don’t really get too caught up in it, because we have absolutely
no control over it."

The blizzard came as a surprise. Forecasts in the
affected regions over the days prior called for a dusting to a moderate snowstorm.

Discussion Questions: How critical is the day after Christmas to a successful
holiday period? What impact do you think the Northeast blizzard will have
on December’s sales? Should or can retailers be planning better for storms
and other weather incidents?

Please practice The RetailWire Golden Rule when submitting your comments.

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7 Comments on "Snowstorm Delays Post-Christmas Action"


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Dick Seesel
Guest
10 years 4 months ago

The snowstorms affecting up to 80 million shoppers on Sunday and Monday may put a dent in retailers’ otherwise strong December results. December 26th has for many years become a day to drive sales, not just manage returns, as stores have learned to leverage traffic and gift cards with aggressive promotions.

It’s possible that some of these sales will shift to the latter part of the week (even with New Years’ Day falling on a Saturday). And specialty retailers can react faster by extending promotions into January…but big chains with longer lead times will probably need to revisit their MLK weekend sales to recover some lost volume.

Bill Emerson
Guest
Bill Emerson
10 years 4 months ago

With the majority of national retailers still dependent on the Northeast for a significant portion of their overall volume, a major storm like this one will undoubtedly hurt their total December business. The good news is that post-holiday business is not tied to a hard date like pre-holiday’s December 25th. December’s business may be off a bit, but it will very likely move into January. Based on the pre-holiday numbers, Q4 should be pretty solid. Lots of pent-up demand out there.

Doug Stephens
Guest
Doug Stephens
10 years 4 months ago

I think the question of how important is day after Christmas sales to “a successful holiday period” depends largely on a retailer’s definition of success.

If success is defined by profit and customer experience as opposed to a mere top-line sale metric, then I would argue that the day after Christmas is inconsequential.

If on the other hand you’re fighting it out in the trenches with everyone else and differentiating solely on the basis of promotion and price, then it will seem far more critical.

The truth is, if you blow your year because of a snow storm, you probably weren’t dominant in your category to begin with.

Ryan Mathews
Guest
10 years 4 months ago

When the roads to the stores are clear, the shoppers will return. It will impact comp week sales but should have a minimal impact on total national seasonal sales.

Craig Sundstrom
Guest
10 years 4 months ago

Pete Nordstrom, president of merchandising at Nordstrom Inc. told the Journal said he wasn’t overly concerned about the blizzard.

Attaboy, Pete, I’m with you 110%: I’m hoping this question was asked out of the need to fill the third slot during a slow week, because if there’s anything emblematic of our nation’s unhealthy obsession with short-term results, it’s the idea that we should be worried about a single day’s results…in part of the country…AFTER the main shopping period has ended. (Come back when a week-long blizzard comes the week BEFORE Christmas, and even then….)

James Tenser
Guest
10 years 4 months ago

Like others here, I believe most of the anticipated post-holiday demand will simply be deferred, not snuffed out by the snowfall.

For the many retailers who close their fiscal years at the end of January, the snow day will have trivial consequence on what has already been confirmed as a strong Q4.

Ed Rosenbaum
Guest
10 years 4 months ago

The storm will be over by Thursday allowing enough time through the first week of the year to finalize the holiday shopping season. Possibly it will be extended through the MLK holiday. What we need now is to get the official word of how successful the shopping season was. The retail industry can use the good news.

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