What Does Hurricane Sandy Mean for Retail?

Hurricane Sandy was a huge disaster that disrupted people’s lives and had a major effect on economic activity in the Northeast region of the country. Retail sales were off by .3% in October according to the Commerce Department – primarily as a result of the storm’s effects. (http://www.marketwatch.com/story/us-retail-sales-decline-03-in-october-2012-11-14) The reasons for this are obvious: people’s lives in the region were turned upside down. Nobody went shopping for the “normal” things in life – groceries, household items, entertainment, etc. And, of course, nobody was burying big items like cars, refrigerators, televisions or other big-ticket items. But I think it will be interesting to watch in the wake of Hurricane Sandy what happens to retail. One of the great strengths of the American economy is its ability to get goods and services to the places where they are needed. In the wake of the storm, once the basic recovery efforts are completed – and these are not insignificant, believe me – there will be demand for certain things. Think about it… Many people in the Northeast sustained damage to their homes and their property. There may be a very interesting upsurge in demand for things like household goods and furniture, cars and even clothing. I’m clearly not going so far as to say that there is an upside to Hurricane Sandy for retail. But again, I want to emphasize the resiliency of the American economy. Our ability to get goods to where they are needed (and wanted) is incredible. It’s one of the great strengths of our system. And remember, we are talking about the Northeast region – one of the economic power centers of the country. There is a lot of economic strength in this region. It will be interesting to watch whether all the TVs and cars and other household items that were damaged are replaced. Many of the things we do here at DVA on a daily basis are very similar to what companies will do in the wake of the hurricane. We help get goods from one place to another in response to supply and demand. It’s that simple. We’re one small cog in the American economy. I want to wish all the people whose lives were affected by Sandy a speedy recovery. And I’ll be watching the retail sector to see its reaction.

Leave a Reply