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Hurricane Sandy Wreaks Havoc But Impact On Retail Mixed

Written by RetailWire Staff

This week's Hurricane Sandy was as bad as (or worse than) expected, and the toll in human/personal terms was serious — in some cases severe. The retail impact is not as straightforward. While many retailers will suffer, supermarkets, chain drug stores, mass merchants and home supply stores could benefit from increased sales of generators, repair equipment, food and supplies. According to The Washington Post, the need to rebuild should create jobs and spur economic activity. With Hurricane Katrina in 2005, two months of poor job growth were followed by a strong rebound in month three, for example.

This time, according to Bloomberg, Walmart closed approximately 80 stores but had no significant damage to facilities or loss of merchandise. Target had 60 stores closed, with 30 on generator power. Home Depot was shipping 750 truckloads of equipment and supplies on Tuesday to its stores in the area. And Lowe's said it had closed only four stores to date. On the department store side, Saks planned to reopen at least some of its stores on Wednesday; Nordstrom had 15 stores shuttered as of Tuesday; and Macy's had up to 200 stores offline. Gap, American Eagle and JC Penney had all closed numerous stores, and Walgreen temporarily shuttered approximately 500 stores.

Numerous big box retailers implemented emergency plans to keep supplies moving, according to the Wall Street Journal. Walmart opened an emergency ops center at headquarters last week and will ship supplies in on trucks from special disaster distribution centers. Home Depot pre-loaded trucks and sent them into the area prior to the hurricane. The company made supply chain changes in order to move things in more quickly than in previous disasters. A Home Depot spokesperson told The New York Times that they reached out to get key supplies anywhere they could in order to ship them to their stores beforehand. Lowe's said it had sent over 600 truckloads of generators, water and supplies to stores and regional distribution centers. Home Depot was managing its efforts from a 350 person command center in its Atlanta, Georgia home office.

Without major store and distribution center damage, as appears the case for most retailers now, many retailers will face a 100 percent loss of business for a few days and a probable slowdown for some period of time. Others, such as supermarkets, mass merchants and home improvement stores will actually see a moderate to large uptick in business, at least in the short-term.

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