Retail

Another Mega Storm Threatens Holiday Sales

Many holiday season analysts point to the skies to determine how well retail sales may do. Their logic is that very bad weather will keep people out of malls and shopping centers. Many of these people will go online to places like Amazon.com Inc. (NASDAQ: AMZN) to buy holiday gifts. If the bad weather reaches most of the country and lasts long enough, pessimistic observations about brick-and-mortar store results may turn deafening. And there is actually a big storm that has overwhelmed much of the country during the past several days.

CNN described the weather across much of the nation as “massive winter storm.” The news company reported awful conditions from Dallas to the Ozarks to Tennessee. A blast of Arctic air has frozen nearly every state other than Florida.

It is difficult to find hard evidence that people do not shop in bad weather. Hurricanes and blizzards aside, most people who need to buy things probably do. Alternatively, people who cannot shop one day, shop the next, or the next. No one is going to let a little cold keep them from getting gifts for their children.

The “Amazon wins” theory about bad weather is also impossible to prove, unless Amazon gets a surge of unexpected sales that last for the period of the Arctic freeze. The people who want to shop at Amazon already go there, even if the weather is good. Amazon claims its sales will rise by double digits from the final quarter of 2012, and they could move up by 25%. It made that forecast months ago. Amazon expected brand new customers then. And it will get them. However, that Wal-Mart Stores Inc. (NYSE: WMT) loses in the process is unlikely. “Everyday low prices” are too much of an enticement.

Analysts may downgrade some retail stocks because of the weather. A number of these companies have already suffered from negative sentiment on Wall Street because of poor November sales. But weak sales in November may mean people have held off shopping until December. The bad weather across the country probably will not last all month. Another mega storm currently threatens holiday sales? Not likely.

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