Hurricane Florence could cost retailers $700M
Hurricane Florence, which at press time Thursday morning had been downgraded to a Category 2 storm, could costs retailers an estimated $700 million in lost sales, according to a report from Planalytics emailed to Retail Dive. Regardless of its category status, Florence’s "impacts, including storm surge, high winds, flooding and power outages, are expected to be dangerous to catastrophic for those in the path of the storm," according to that note.
The impact, however, pales compared to last year’s storms. Some $2.75 billion in consumer and retail sales (including restaurants) were lost to Irma, in addition to costs incurred by the damage caused directly by the storm, according to Planalytics, which provides weather-related planning tools for businesses. Hurricane Harvey cost businesses $1 billion, Planalytics said in an email to Retail Dive last year.
Target on Wednesday said it’s preparing for Florence's impact on more than 130 stores and nearly 20,000 team members in its path. The company will shutter some stores while stocking up in others on the 1,500 products customers need most, including food, flashlights, batteries, phone chargers and cleaning supplies. Walmart on Wednesday said some Walmart and Sam's Club stores will close or adjust hours in North Carolina, South Carolina and Virginia. Nonprofit Soles4Souls is working with retailers to distribute shoes and clothing to those displaced by the storm, according to a press release emailed to Retail Dive.
The $700 million in estimated lost sales includes purchases that retailers and restaurants will miss and not make up, and is in addition to damage caused directly by the storm, like property loss and insurance claims, according to Planalytics.
The focus in the preparation, midst and aftermath of any hurricane is on the protection of human life. "Residents from South Carolina to Maryland are currently under a state of emergency, with over 1 million consumers given evacuation orders," Planalytics noted on Wednesday.
Many retailers have a part in that by providing key staples like food and water and products to shore up homes, as well as in ensuring that employees are kept safe. "Whenever a disaster hits, we balance our need to keep stores open for the community while making sure our team members can take care of themselves and their families," Target said in a blog post on Wednesday. At the time of publication, Target has closed four stores in North Carolina and two in South Carolina with an eye to, "reopen locations as quickly as possible when it’s safe to do so."
According to Planalytics, retailers selling critical supplies tend to benefit from such storms, while businesses like restaurants and apparel retailers have almost no business. Many people suffer in a storm's wake, and nonprofits like Soles4Souls lean on retailers' generosity to get needed supplies to victims. The organization is now seeking donated items from retailers and manufacturers including athletic shoes for all ages, men's and women's work-appropriate footwear, underwear, bras and socks, and jeans, pants and skirts.
"Disaster relief has always been a core part of our mission,” Soles4Souls CEO Buddy Teaster told Retail Dive in an email. “After a devastating storm, rebuilding starts with the basics. Hurricane Florence has the potential to deliver disastrous conditions, and we are preparing to respond with new shoes and clothing as quickly as possible.”
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