Blizzards and Spending
Reporters are always looking for angles and that includes writing about blizzards. It’s no fun writing “a whole bunch of snow fell on New York, the roads were bad, so people stayed home.” So what angle did some writers take about this most recent northeast “blizzard?” That angle would be “spending.”
I’ve been through a number of snowstorms (and even worse, ice storms) over the years. I don’t recall ever being concerned or upset that the weather was keeping me from experiencing a sale offered by one of our benevolent retailers. So when I started seeing stories about a “lost retail spending caused by snow” disaster, I started questioning their accuracy. Actually, I concluded that if the stories were accurate, it was not a disaster at all. Instead, the blizzard had forced discretionary retail spenders to keep an extra billion in their bank accounts (or at least off of their credit card balances.)
Think about it. If retailers “lost” $1 billion because spenders were kept home by snow, the spending that would have occurred was entirely discretionary. The “spending” was gone forever. To me, that’s a good thing. It’s kind of like a recreational clothes shopper having to stay away from the mall for a weekend because they can’t find their credit cards or their car is in for repair.
I decided that the headlines like those published in New York Magazine couldn’t be accurate. I questioned whether a snowstorm could cause $1 billion in retail sales to disappear forever. Wouldn’t at least some of these home bound shoppers go to the stores when the snow cleared and buy what they needed or wanted?
It turns out that my skepticism was warranted.
My research revealed that the data source for the “lost sales” stories came from a shopping research organization called “ShopperTrak.” It’s story contained a headline that conveyed the correct message: Northeast Blizzard Postpones $1 Billion in Retail Sales
Did you notice the word “postponed?” Apparently some of the news reporters and writers didn’t. The ShopperTrak spokesperson was not gloom and doom at all about retail spending for the post-holiday period, even with the snow:
As expected the 2010 blizzard throughout the Northeast halted nearly all retail visits and spending during a period that is fairly crucial for retailers. “And at this point the prospect of momentarily pausing a potential $1 billion in sales has the collective industry holding its breath. While we do think there will be some retail strength later this week and into the weekend as folks begin to dig out, it will be interesting to see if levels recover in time to boost December sales and the overall holiday shopping season. At this point we believe our forecast of a 4.0 percent sales rise with a 1.8 percent traffic increase remains accurate behind the strength of November, a strong sales day on Dec. 23 and the possible late week surge over the next few days.
The lesson here is don’t pay much attention to the popular press if you want the hard truth about personal finance. That’s my job.