Retailers See Strong Sales Gains For October
NEW YORK (AP) -- Americans spent briskly in October before Superstorm Sandy hit the Northeast, but the question is whether they're still willing to get an iPhone for Christmas if they plunked down hundreds on a generator for Sandy?
The storm, which hit at the tail-end of October, did not appear to negatively impact sales during the month: Twenty-one retailers from discounter Target to department store Macy's reported that sales during the month were up 5 percent from the previous month, according to the International Council of Shopping Centers, beating the trade group's estimate growth of 3.5 percent to 4.5 percent.
Still, 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 who bought generators, bottled water and other supplies before and after the storm will be less inclined to spend during the holidays.
Michael P. Niemira, chief economist at the shopping center trade group, said the sales reports give reason to be optimistic. However, he said there still are "considerable uncertainties."
"We'll see any negative impact from Sandy in coming weeks," he said.
Few retailers offered details Thursday on how their sales were affected by Superstorm Sandy, which hit the East coast on Oct. 27 and disrupted business activity from North Carolina to Maine. Many stores including Macy's and Target had to close stores up and down the Eastern Seaboard for up to days because of power outages, transportation shutdowns and other issues related to the storm. Many began reopening stores, and analysts expect the full effects of the storm to spill over into the first week of November.
Home improvement chains, drugstores and food stores were expected to benefit as shoppers stocked up on emergency supplies before and after the storm. But sales at department stores, clothing retailers and others that sell discretionary items were likely hurt by Sandy. Still, only a handful of retailers representing about 13 percent of the $2.4 trillion U.S. retail industry report monthly revenue. And the list excludes Wal-Mart Stores Inc., home improvement chains like Home Depot and consumer electronics chains among others that might have been impacted by the storm.
Home Depot would not discuss sales figures on Thursday, but said its stores have been busy, as one would expect. About 44 of Home Depot's 2,200 stores were closed on Monday when the storm approached, but by the next morning most had reopened. By Thursday morning, only two remain closed, two locations in New York City.
"From a few days before the storm until now we're moving in trucks all the time with products to make sure that stores stay replenished," said spokeswoman Paula Drake.
Macy's, which generates 8 percent of its annual revenue from its New York City stores, said Thursday that it was hopeful that it will recoup some or most of its lost sales from the storm during the remainder of the fourth quarter. More than 200 Macy's and Bloomingdale's stores were closed for some period of time, ranging from a few days to multiple days as a result of the storm.
The retailer said sales increased 4.1 percent in October, up from the 2.9 percent increase analysts had expected. And Macy's raised its guidance for revenue at stores opened at least a year for the second half to 4.0 percent, up from the original estimate of 3.7 percent.
"Business was strong in October," said Terry J. Lundgren, chairman, president and chief executive officer of Macy's in a statement. "We are feeling confident about our prospects for the upcoming holiday season ... despite the interruption caused by Hurricane Sandy in the first few days of the fourth quarter."