Dec 17, 2013
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Snowstorm unlikely to hurt US holiday sales

Dec 17, 2013

The snowstorm that hit the U.S. Northeast and Midwest this past weekend is unlikely to hurt overall holiday sales, analysts say, even as the shorter shopping season makes every day crucial for retailers.

Although the cold weather hindered customers from visiting stores on Saturday, demand is expected to pick up later in the week, analysts said.

"This past weekend, the Northeast was a mess with snow starting on Saturday and continuing into Sunday, perhaps encouraging shoppers to postpone shopping to the coming week, buy more online, or just wait for Super Saturday weekend," Topeka Capital Markets analyst Dorothy Lakner wrote in a note.

Data firm ShopperTrak, which estimates sales volume based on shopper traffic, has projected that the three biggest shopping days for the holiday season will be this coming Friday through Sunday. ShopperTrak had expected December 14th to be the fifth busiest.

Super Saturday, the Saturday before Christmas when many shoppers try to get in their last minute shopping, is typically the second busiest for in-store sales, behind only "Black Friday," the Friday after Thanksgiving, according to ShopperTrak.

The season, which has six fewer days than last year because of a late Thanksgiving, is expected to be the toughest since the financial crisis of 2008, with retailers forced to discount heavily to attract budget-conscious shoppers.

The massive storm, which affected about a third of all Americans, resulted in flight delays and cancellations at major airports in Chicago, Washington, D.C., New York City and Newark, New Jersey and made roads and highways treacherous for driving.

However, Craig Johnson, president of retail consulting and analytics firm Customer Growth Partners, told Reuters on Sunday that storms like this one that are predicted a few days ahead "don't destroy demand ... they displace it forward or backward."

"Over the next week this will all even out and, based on historical experience, sales will be recouped."

Retailer Toys R Us did not comment on shopping during the past weekend but said there is still time to shop.

Toys R Us' omnichannel capabilities such as 'buy online and pick up in store' coupled with extended store hours will enable shoppers to complete their purchases, spokeswoman Linda DeNotaris said.

Morgan Stanley analyst Kimberly Greenberger said in a note that the cold weather so far in December should help sales of winter apparel, but mall traffic has been "very poor" in the first half of the month.

"This is the week retailers could lose confidence in sales projections and hit the 'panic button' by offering deeper than planned promos," Greenberger said, with the caveat that it is too soon to tell.

Any weather disruption next weekend could hurt retail sales.

In a survey by America's Research Group and coupon processor Inmar, 48.3 percent of consumers surveyed said that they were mostly or all done with their holiday shopping, compared with 45.2 percent this time last year.

Of those who are not yet done with their holiday shopping, 22.2 percent are planning to wait until the last three days to finish up, according to the survey.

Retailers such as Dick's Sporting Goods Inc and Tractor Supply Co that provide snow supplies and winter wear are likely to benefit from the storm that came just a week after another massive storm froze the Southeastern United States, analysts at Suntrust Robinson Humphrey said.

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