NEW YORK (Reuters) - A major snowstorm on the U.S. East Coast kept many shoppers home just after Christmas, casting a pall on the final act of the holiday sales season.
The weekend’s blizzard conditions, which shut down airports and halted traffic, also weighed on U.S. store chains that sought an extra boost from post-holiday purchases.
Analysts said the storm broke the momentum of improved holiday sales and could herald an earlier return to consumer frugality in 2011.
“But for the weather, the momentum would have continued right through to this week,” said Joel Bines, managing director of AlixPartners’ global retail practice.
The Standard & Poor’s Retail Index slipped 0.2 percent on Monday, while the broader S&P 500 was up 0.1 percent. Earlier in December, retail shares hit a 3-1/2-year high and are still trading near those levels. The index has risen about 24 percent this year.
The week after Christmas offers U.S. retailers a last opportunity to capture holiday spending and typically account for about 15 percent of total sales for the season, according to the National Retail Federation. Store chains offer additional discounts to lure extra purchases from shoppers when they come to return gift items or redeem gift cards.
Natalia Barry, who had the day off from her advertising job, was shopping at Macy’s in Manhattan.
“I have to find other things for New Year’s and stuff that might be better priced than it would be ... any other day,” she said.
Research firm ShopperTrak said the blizzard could push December 26 out of the running for one of the top 10 biggest shopping days of the year, though some consumers may be back at stores later in the week when conditions clear.
Shoppers who did venture out during the weekend said they were ready for a spending diet in early 2011 as they wait for a U.S. economic recovery to gain momentum and add jobs.
“I don’t think the economy is getting better. I think it is getting worse, actually,” said 16-year-old Loris Gabriel, who was still buying items for family members in Manhattan’s Harlem neighborhood on Sunday due to the steeper discounts.
Clyde Johnson, a 45 year-old train operator from Yonkers, New York, was shopping on Sunday at a J.C. Penney Co Inc store in Manhattan, but said he would cut back as soon as the holidays end.
“If I can’t afford something or I feel it is too much and I really want it, I will save until I have the money,” he said.
Shares of department store chain Kohls Corp were down 0.2 percent, while Target Corp’s were down 0.3 percent and Amazon.com Inc’s were down 0.1 percent. Nordstrom Inc shares fell 1.5 percent.
The storm may force retailers who had planned to use post-holiday sales to empty their shelves of winter merchandise to extend those promotions, said Moody’s analyst Scott Tuhy.
Online sales may also benefit to some extent from the snowstorm, particularly for strong web retailers like Macy’s Inc. “A lot of people who couldn’t get out were on their computers,” Tuhy said.
A pullback by shoppers now that the holidays are winding down could dent the U.S. economy’s recovery, since consumer spending accounts for 70 percent of gross domestic product.
Retail spending in November beat expectations, leading analysts to raise forecasts for the holiday season. The National Retail Federation sees holiday sales up 3.3 percent, a major jump from the 0.4 percent increase last year and the 3.9 percent fall in 2008 due to the financial markets crisis.
But shoppers will balk at the higher retail prices for clothing that are likely to come in 2011 because of higher cotton prices, which have nearly doubled in 2010.
“There’s a willingness to spend,” said Bines. “But I don’t yet think the consumer is ready for higher prices.”
Wall Street analysts are expecting December comparable sales at 28 major U.S. retailers to be up 3.6 percent, led by discounters and department stores.
Data firm comScore said on Wednesday that online spending was up 12 percent for the season at that point. Amazon.com said on Monday that sales of e-books had hit a company record on Christmas Day.
Additional reporting by Dhanya Skariachan and Jon Lentz; Editing by Michele Gershberg, Dave Zimmerman