NEW YORK (CNN/Money) -
The one-two-punch of the back-to-back snowstorms that engulfed the Northeast over the weekend overwhelmed most shoppers and buried at least two crucial shopping days.
Winter is still officially two weeks away, but many were greeted to an unexpected early start to the season that saw almost 4 feet of snow in some regions.
The gusty winds, and at times the blizzard-like conditions, kept most people at home on Friday and Staurday. That was a blow to retailers who were counting on big weekend sales during one of the most important sales period of the year.
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| A few brave shoppers struggle with bags and umbrellas outside the Macy's flagship store in Manhattan as the snow came down Friday afternoon. |
But early anecdotal evidence gathered from a few malls in the region suggest that retailers are hoping the weekend wasn't a complete disaster when they tally the final sales numbers.
John Mott, general manager of the Palisades Center Mall in West Nyack, N.Y. told CNN/Money that mall traffic on last Friday was two-thirds of a normal day, while traffic on Saturday dwindled to just one-third the normal count at this time.
However, Mott said he was fairly confident of a pick-up in traffic and sales on Sunday.
"People really came out on Sunday and they spent big money," said Mott. "The big department stores did as well as half a nornal Sunday. I suspect Sunday will be a blowout for some retailers but not for others."
A manager at the local Gap (GPS: Research, Estimates) store said that a few stores at the mall were closed Saturday but Sunday was "surprisingly busy."
At the J.C. Penney (JCP: Research, Estimates) store at the Roosevelt Field Mall in Garden City, N.Y., Darcy, a store manager said Saturday was a lot slower compared to last year but that Sunday brought in a flock of shoppers.
Michael Niemira, senior economist with Bank of Tokyo-Mitsubishi,
With a winter storm pounding the Midwest and much of the populous Northeast this weekend, industry watchers question if retailers can really afford to lose any shopping days to Mother Nature less than 20 days before Christmas.
Michael Niemira, senior economist with Bank of Tokyo-Mitsubishi, said Friday he's a little concerned because it reminds him of a similar situation a year ago that had dismal consequences.
"We've been down this path before when a snowstorm hit the East in the first week of December last year. It was a major headache for the season and the industry never recovered from it," Niemira said.
In fact, weekly sales at the major U.S. chain stores in that week fell 2.3 percent, enough to kill the crucial shopping season for retailers, according to the BTM figures.
As back-to-back storms moved to the the East Coast from the Midwest Friday, it's obvious that comparisons will be made to last year. At the same time, Niemira points out a few key differences.
"Other factors and not just the weather cut into sales last year," he said. "Consumers weren't in a spending mood because they were worried about the war [that was pending with Iraq] and the economy."
"The bottom line today is that the economy is improving and the consumer is much more confident," Niemira added. "This storm undoubtedly will hurt sales, especially on Saturday, but it could also trigger a different response where it shifts demand to other channels such as the Internet, catalogs and to gift cards."
Holiday sales are expected to grow about 4 percent this year, on average, a definite improvement over last year's anemic 2.2 percent increase, which was the worst performance in a decade.
But now with the first wave of harsh winter weather making its impact, the question is whether it will dent this year's results.
Richard Hastings, chief retail analyst with Bernard Sands, said he's standing by his forecast for a 4 to 4.5 percent increase, but he's worried.
"Research has shown that shoppers in the Northeast tend to be spend more at this time of the year than in other part of the country. So any disruptions to their shopping schedules could have a material impact on overall sales," he said.
"Snow becomes an issue with older shoppers who are very important to this season. With bad weather, we could also get a significant decrease in store traffic among older adults."
Benefit to online retailers?
The bad weather could be an boon to online retailers, who already are cheering the holiday. Shoppers flocked to the Internet over the Thanksgiving weekend, ringing up $1.2 billion in total online sales, up 25 percent from 2002.
"Spending patterns last year for the weekend of Dec. 7 when the storm hit were significantly above the average for the holiday season, up 19 percent," said Graham Mudd, analyst with comScore Networks. "While it's difficult to predict exactly how consumers will respond this time around, a winter storm certainly does increase the convenience appeal and the likelihood that consumers will shift their spending from offline to online channels."
For their part, Wal-Mart Stores (WMT: down $0.24 to $53.24, Research, Estimates) and Target (TGT: down $0.29 to $38.90, Research, Estimates), the No.1 and No. 2 retailers, say they're not losing sleep just yet.
"Changes in weather are welcome," Wal-Mart spokesman Tom Williams said. "We usually see a spike in shoppers right before a storm when people shop for essential items and afterwards. Wal-Mart can get through this."
Wal-Mart on Monday reiterated its previous December sales forecast of a gain of between 3 to 5 percent. In a pre-recorded sales updates covering sales through Friday Dec.5, the retailer said it's strongest product categories were office supplies,toys, infant products, hosehold paper and pharmacy products.
The retailer had no comment about shopper trafffic over the weekend.
Separately, Target (TGT: Research, Estimates) spokeswoman Paula Thornton-Grear on Friday said the company is keeping an eye on the storm but isn't worried.
"Typically, winter weather is both bad news and good news," said Paul Walsh, a retail meteorologist with Planalytics. "It's good because it drives demand for seasonal goods like coats, gloves and snowboards. The risk is that we will have more storms ahead, but it's hard to predict if they will fall on weekends."
"The worst case scenario here is that stores close in the Northeast on Saturday. That's a lost day of sales," Walsh added. "But people could postpone their holiday shopping to the next day or the next weekend."
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