Snowstorm, cold weather is a gift for retailers

December 16, 2016

By Joe Taschler , Milwaukee Journal Sentinel

Let the flakes fly.

A snowstorm followed by bone-rattling cold is zeroing in on Wisconsin and the Upper Midwest Friday into Saturday — the busiest shopping weekend of the year — but retailers are looking at the Arctic blast as a well-timed holiday gift.

“Most retailers have really suffered through an overly warm December last year where they couldn’t sell boots and gloves and winter coats and so forth,” said Dick Seesel, principal at Retailing in Focus, a consulting firm in Mequon. “They are probably welcoming this as long as it doesn’t shut things down for an extended period of time.

“Even with a snow day or two, the opportunity to do more business on cold weather goods probably offsets the risk of losing a day to bad weather.”
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Up to one foot of snow in weekend forecast

Winter finally behaving like winter will contribute to a significant increase in apparel sales this holiday season compared with last year, said Burt Flickinger III, managing director at Strategic Resource Group, a retail consultancy in New York City.

“Given that there were so many postponed purchases because of warm, and in many cases, green Christmases in northern parts of the U.S. in 2015 and 2014 … We estimate there is going to be at least a $550 million increase in apparel sales,” Flickinger said.

But it’s not just boots, gloves, hats, coats, scarves and wool socks leading the charge.

“I don’t believe it snowed at all last December until shortly after Christmas,” said Stew Elliott, president and family co-owner of the Elliott’s Ace Hardware chain of stores in metro Milwaukee. “There are people who haven’t bought a shovel or a snow blower or maybe a couple bags of salt because they haven’t needed to.

“There’s a little bit of catching up going on,” Elliott added. “We’ve had some better days with these storms the last couple weeks.

“This is kind of a return to normal for us,” he said. “A normal weather year is good.”

A winter storm warning kicks in for southern Wisconsin beginning at 2 p.m. Friday and goes through 9 p.m. Saturday, according to the National Weather Service.

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Retailers will be offering all sorts of sales and incentives to bring shoppers through their doors during the weekend.

Boston Store said Thursday it will give a gift card valued at between $5 and $500 to the first 400 people at each store starting at 7 a.m. Sunday. There will be one guaranteed $500 card winner at every location, said Bon-Ton Stores Inc., the parent company of Boston Store. Bon-Ton said an entrance at each store will be marked with signs and open at 6:45 a.m. so customers can line up out of the cold weather before the department store opens.

At JCPenney, early morning customers on Friday and Saturday will be greeted with an envelope containing coupons for discounts.

Meanwhile, those customers will need places to park.

Winter Services, based in West Allis, handles snow removal for some of the largest shopping centers in the region. For this coming weekend, the company will have 600 people and 300 pieces of snow removal equipment on duty to handle whatever winter brings, said Jay Felton, president of the company.

Felton says everyone at the company is aware of the stakes for retail customers, especially this weekend. “I think pretty much every weekend is treated like a Black Friday weekend between Thanksgiving and Christmas in the snow business,” Felton said. “Our retail customers are so sensitive to it that we have to be on our A-game every time.”

The holiday season, defined by National Retail Federation as sales in the months of November and December, is the biggest time of year for retailers. The period can account for as much as 30% of a retailer’s annual sales.

The final Saturday before Christmas is typically one of the busiest shopping days of the year. “For a lot of retailers it can be 5% of the November-December season just in that day,” Flickinger said.

For 2016, the NRF estimates that holiday sales will increase 3.7% to $630.5 billion, compared with last year’s 4.1% growth.

The average increase in holiday sales for the past 10 years is 2.5%.

Flickinger is forecasting holiday sales to be up this year in a range of 2.5% to 3.2%.

Another issue is the calendar. Dec. 25 this year falls on a Sunday. That means there is an extra Saturday — Dec. 24 — to shop prior to the Christmas holiday.

“It’s going to be wild winter weather this weekend, but there’s also an extra Saturday for shopping next weekend,” Flickinger said.

“I think you could argue there is a lot of business that could be done on the 23rd and 24th,” Seesel said.

A big snowstorm on this particular weekend won’t have as much of an impact on big national retailers. Seesel said. That’s because those companies have stores across the country, and the weather isn’t going to be bad everywhere.

“It would have had a bigger impact 25 or 30 years ago,” Seesel said, especially for stores that had only a local presence.

“It’s much less of an issue now,” he said. “All these national companies like Kohl’s or Macy’s or Penney’s are pretty much insulated from the effects of bad weather in one market or another.”

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Shoppers these days also have options that weren’t around 30 years ago.

“The other big game changer, obviously, is people if they can’t get out, they can shop online,” Seesel said. “Things are moving so quickly in that direction. I think that’s another thing that really cushions retailers from the impact of a snowstorm.”

As a local retailer, Elliott said he is somewhat concerned about the frigid temperatures that are on the way. “People don’t want to leave their house when it’s 10 below,” he said.

Still another factor is the willingness of folks around here to tackle winter weather head-on.

“Milwaukee is pretty unique, but 8 inches of snow, things get cleaned up really quickly around here,” Seesel said. “They do a fantastic job keeping the roads clear here.”