Tuesday, February 16, 2010

Snow Days Not So Fun for Retail and C-Stores

The blizzard conditions that have hammered over one third of the U.S. have most grade-schoolers thinking about days and weeks of no school and tons of sledding. But the execs of many retail outlets, convenience store chains, and even the representatives on Capitol Hill have a little bit more bleak outlook. While sales of bread, milk, and of course sledding gear are likely sky-rocketing, on the whole, snow days are not good for the economy.

First of all, travel is down for obvious reasons. So, of course fuel sales are down, but in fact c-stores don't make most of their money on fuel sales. It's the peripheral items that make their businesses float. And, while fewer people are driving, that means less Little Debby's, 36 oz. slushies, fountain sodas, and the like.

Other retail is feeling the same strain--especially in the midst of one of the year's biggest shopping holidays: Valentine's Day. When a blizzard struck Indianapolis on Valentine's Day two years ago, hospitals prepared for a baby boom in November. Do the math. And, while that may seem like a splendid way to spend Valentine's Day to the consumer, the retailers aren't so pleased. Most of the common Valentine stock is perishable--flowers, chocolates, cakes, etc.--cannot be stocked away for next season.

There are other economic indicators that dip during a blizzard, too. New home construction hits a stand-still. Home sales are postponed due to the inability to show, list, and even perform inspections for closings. Countless businesses lose days and weeks of valuable productivity. And, as Reuters reported, local and state municipalities are asking for federal aid to cover the cost of digging out.

But this is common to any snow storm. The phenomenon with this most recent onslaught of snow is how widespread it is. We're not talking about one mall, one city, or on region seeing a slow-down for a few days. This blizzard has affected over a third of the nation, and 8 of the 10 most populous states in the Union.

The snow may be melted by March, but it will be 3rd quarter before the full economic impact can be measured.

Labels: C-store, Convenience Stores, Economy, Retail, Snow Storm