Blizzard blows down March's retail sales

Discount Store News, April 19, 1993 by Richard Halverson

Retailers often appear to use bad weather as a whipping boy on which to blame poor monthly sales, but for March, they have a valid excuse. The so-called "Blizzard of the Century" shut down much of the East and Southeast over the March 13 to 14 weekend, and wreaked havoc on March retails sales.

"The weak sales in March . . . as far as anyone can tell, [were] entirely weather related," wrote Bernand Sosnick, retail analyst for Oppenheimer & Co., New York, in a research report on Wal-Mart.

"The storm that hit the East Coast and the southern states in mid-March caused about 20 Sam's Clubs to be closed in Mississippi, Tennessee, Alabama and Georgia. Some Sam's units were closed for two days, which is unusual," Sosnick wrote. "In Chattanooga, Tenn., and Scarborough, Me., local snow load limits on roofs kept the clubs closed even though there was no damage to the buildings. In areas unaffected by winter storms, a simple lack of spring weather has hampered sales of spring merchandise ..."

Wal-Mart reported comparable store sales gains for March, including Sam's Club, of 3%, but Sam's Club comp store sales fell 3%.

At Kmart, the storm affected more than 1,000 stores in 21 states, Kmart chairman Joseph Antonini told stock analysts in a teleconference April 1. It was the biggest effect by a snow-storm ever, he said. "The storm put us in a difficult position. It covered a wide geographic location: well over 400 stores were closed all that day Saturday and between 100 and 150 were closed on Sunday and some remained closed on Monday."

In the Northest, sales were down 28.5% on Saturday, 19.5% on Sunday, and 5% on Monday, Antonini said.

In the Midwest, sales were down 42% that Saturday and 32% on Sunday, while revenues in southern stores fell 33% on Saturday and 11% on Sunday.

The storm hurt Kmart's specialty stores, as well as its discount stores. Sales have picked up since, he said, but comp store sales for March essentially were flat (down 0.2%).

Michael Bozic, president and ceo of Hills Department Stores, Canton, Mass., seconded Antonini's view of the impact. "The storm hit our entire chain. We got clobbered."

On the Sunday of the storm, 127 of 154 Hills stores were closed, up from 73 the previous day. Sears blamed the severe weather for the 1.4% slippage in same store sales.

Family Dollar, Matthews, N.C., was also hit, with more than 500 of its 1,934 stores closed that weekend in a broad swath from Alabama through the western part of the Carolinas and into Maryland, Pennsylvania and New England.

The storm seriously affected the entire state of Alabama down to the Gulf Coast. The mid-March blizzard was the primary reason that Family Dollar's comp store sales for March came in at 3.7%, instead of the planned 6%, said executive vp George Mahoney.

The 184 stores of Burlington Coat Factory, Burlington, N.J., lost about 90% of expected business on Saturday, March 13, and two-thirds on Sunday, March 14, president Monroe Milstein said.

Burlington had to close about 50 stores that Saturday. Other stores stayed open until about 1 p.m., but virtually no customers came in, he said. About 25 stores remained closed on Sunday.

"We still had a double-digit comp store gain for the month," Milstein said, "but it would have been much higher without the storm."

Bradlees, Braintree, Mass., also experienced mediocre results in the week following the storm because customers were more concerned about digging out their cars and homes than shopping. "Store traffic was down by about a third during the weekend," spokesman Coleman Nee said.

But traffic also was off for four days after the storm as people tried to recoup from the storm, he said.

"The storm obviously hurt March sales" which fell 4%, compared to the same month in 1992, Nee said. Comp store sales declined 3%.

Caldor, Norwalk, Conn., closed only seven of its 140 stores in the Northeast on Saturday and Sunday. But it might as well have closed many more, since few shoppers ventured into them.

Columbus, Ohio-based Value City reported its comp store sales plunged 10.7%, and chairman and ceo Jay Schottenstein said, "The disappointing sales results were a direct result of the impact of bad weather conditions, including snowstorms, throughout the month and especially during weekend shopping."

JCPenney was one of the few retailers that didn't claim the storm hurt March results. It said a 2.2% gain in same store sales exceeded plan.

Dollar General, also operating in the Southeast and East, reported a 13% comp store gain for the month. It counteracted the storm by mailing its April circular as a standalone piece to customers, said chairman Cal Turner Jr., instead of piggybacking it with other circulars.

            Selected Retailers: March 1993 Sales
                         Total Sales               Comp Store
Chain         (In $Millions)   % Chg. from '92   % Chg. from '92
Wal-Mart(1)       $4,698            20.0%              3.0%
Kmart              2,183             1.5              (0.2)
Sears              1,970            (0.6)             (1.4)
Target                NA            17.0               7.0
Ames                 172            (8.0)              6.9(3)
Caldor               172            11.7               1.2
Best Buy             169            76.0              14.0
Bradlees             131            (4.0)             (3.0)
Shopko               130             1.7               1.5
Venture              148            (3.0)             (6.5)
Jamesway              62           (13.7)             (6.0)(4)
(1) Total corporate sales
(2) U.S. Kmart stores
(3) Based on 309 surviving Ames units
(4) Based on 108 Jamesway units, down from 122
()--percent decline  Source: Company reports