By Karen Talley and Annie Gasparro
It's going to be boom or bust for retailers and restaurants as
the blizzard approaches the Northeast.
Sears Holdings Corp. (SHLD) has hundreds of stores from
Philadelphia to Maine that are in the storm's path, and they are
all still open as the retailer capitalizes on demand for
snowblowers, shovels, portable generators and other
blizzard-weather merchandise.
There is an abundance of these products because the winter has
largely lacked snow so far, spokesman Larry Costello said.
Stores were set to stay open as long as possible to meet
continued demand. "We are currently monitoring the storm and will
make a decision about our stores' hours of operation," Mr. Costello
said.
Brian Patry, assistant store manager at a Sears store in South
Portland, Me., said mid-morning Friday that his store was planning
to stay open for the duration. Storm merchandise started moving
Thursday afternoon and "strong" demand has continued, Mr. Patry
said. Consumers are mostly buying snowblowers, generators, and
vacuums that suck up water after high tides. Flashlights and
batteries were also popular, as was cold weather gear, Mr. Patry
said.
Customers are "upbeat and energetic, taking it as it comes and
looking for sunshine on Sunday," Mr. Patry said.
Wal-Mart Stores Inc. (WMT) was in full storm preparation mode
for its roughly 130 locations in the storm's projected path. The
retailer, known for its sophisticated emergency and storm response
measures, was preparing by placing generators in areas expected to
be effected. The retailer also had snow removal vendors on standby
to clear roofs and parking lots, and its emergency merchandise team
was making sure stores were well stocked with items like
snowblowers, ice scrapers and ready-to-eat foods. Trucks were set
to be back on the road to replenish stores as soon as the storm
passes.
Home improvement retailers Home Depot Inc. (HD) and Lowe's Cos.
(LOW) can be expected to do booming business.
However, for smaller retailers that don't offer blizzard wares,
it's going to be a tough weekend. At Saks Inc. (SKS), for instance,
there are already plans to close several stores early, a
spokeswoman said. The Gap Inc. (GPS) location on Sixth Avenue in
New York City was sending employees home early from the virtually
empty store.
For restaurants, weather is always an issue this time of year.
When a storm looms, their sales typically take a hit within one to
two days, but "sales tend to be made up in the days following the
storm because of pent-up demand," said Miller Tabak analyst Stephen
Anderson.
Cabin fever didn't strike after superstorm Standy, however,
because of gasoline shortages in the area. "We caution it may take
longer for normal sales trends to resume because of the potential
for widespread disruptions," Mr. Anderson said.
Dunkin' Brands Group Inc. (DNKN), which is based near Boston, is
"by far" the most likely chain to be hurt by the storm, according
to Mr. Anderson, as more than half of its donut and ice cream shops
are in the Northeast. Dunkin's headquarters were closed Friday, but
the closure of its stores is ultimately up to the franchise
operators. A Dunkin' spokeswoman said the corporate office has
"been in contact with our field teams and franchisees in
preparation for the threat of the storm" and will closely monitor
the situation, making safety its top priority.
Restaurants with waiter service, such as Cheesecake Factory
(CAKE) and Darden Restaurants Inc. (DRI), the owner of the Olive
Garden and Red Lobster chains, will be hurt over the next couple of
days as they are typically reliant on weekend business, Mr.
Anderson said. If roads and power aren't restored by early next
week, the storm could also dampen their Valentine's Day days.
Panera Bread Co. (PNRA) and Chipotle Mexican Grill Inc. (CMG),
which have about 10% to 15% of their stores in the storm's expected
path, could get off easy in that most of their business comes
during the week. But if commuters aren't back to their normal
working schedule by Monday, these chains will be impacted, too.
"We're not looking forward to this storm coming up the East
Coast over the weekend, but that's the nature of [sales] in the
first quarter," said Bill Moreton, Panera's co-chief executive.
"Who knows what affect that'll have," he said on a conference
call Wednesday. "We'll see together." Superstorm Sandy caused
Panera's customer traffic to decline last quarter, when it would
have otherwise been relatively flat.
Delivery chains, like Domino's (DPZ) and Yum Brands Inc.'s (YUM)
Pizza Hut, profit off more people avoiding the roads. Valentine's
Day is always a big day for pizza, surprising as it may be, and
lingering snow could boost sales even more than normal.
-Write to Karen Talley at karen.talley@dowjones.com
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