NonFoods Talk: The eye of the storm

Hurricane Sandy wreaked havoc in the Northeast. Mass retailers, as a whole, deserve a solid grade for getting consumers prepared for the storm and pening up as quickly as possible after it ended.

Superstorm Sandy taught the mass retail industry from Virginia to Maine just how important it is to be prepared for just about anything.

Accurate weather forecasts for the vicious storm, which caused damage up and down the Atlantic Coast in late October, was so well publicized that consumers had days—even an entire week—to prepare. With many consumers taking the storm seriously, it meant a run on everything at the supermarket, with high demand for batteries, milk, food containers, flashlights and even peanut butter. You can never have too much peanut butter, one New Jersey consumer told me just hours before the wind started to kick up.

Interestingly, retailers in the metro New York area handled the situation quite well. For example, a manager at one store started to ration C, D and AA batteries about four days prior to the storm to prevent hoarding and provide as many of his shoppers as possible a chance to purchase batteries before the hurricane hit. A friend told me that a Home Depot near his home moved batteries, flashlights and other necessities to survive a storm to the front of the store and positioned two store employees there to help with any other questions.

Generators, and the fuel needed to operate them, also became hot commodities in the days after Sandy hit. As everyone knows, parts of the Northeast were without power for as long as two weeks and while the weather was warmer than usual for several days after the storm, consumers were eager for anything to get heat, hot water and electricity to their homes.

Again, the consensus was that retailers were prepared to do their part. Plastic gas containers were plentiful, with one store manager saying that his company had sent a truckload to the metro area just days before the storm.

Finally, retailers were quick to reopen. A nearby Stop & Shop store opened just two days after the storm even though it only had emergency lighting and was selling everything that did not require power to heat or cool. For a person who survived on cereal and a decreasing amount of fresh milk, it was a godsend.

The experts say that the holiday selling season should produce a 4% to 6% increase in overall sales from last year. From this angle, that sounds a bit optimistic. With unemployment at a persistent 8% rate nationally and gasoline prices still hovering around $4 a gallon, the guess here is that consumers are still a bit hesitant to be making many incremental purchases.

Less-expensive products will perform better than expensive items and this trend will give grocery stores an opportunity to stock and sell the lower-end housewares and gift products that could help shoppers balance their budgets during the season. Of course, grocery stores still need to be careful with their selection.

The good news here is that of all mass merchants the supermarket is the least vulnerable to dramatic changes in consumer shopping patterns. The bad news is that even the grocery store is at risk when it comes to consumer’s holiday purchases.

Rumors have it that Time, Inc. is exploring more ways to build single copy sales of its best-selling magazines, particularly People and Sports Illustrated. The company is looking at how to rebuild sales of these titles, and others, simply because of the profit they have historically generated for the company and, it should be mentioned, for retailers.

The question, of course, is what are they going to do. Two strategies they are reportedly working on are to put a much greater emphasis on covers and to work with retailers to develop more cross-merchandising opportunities. Other magazine publishers have made it clear that they need retailers to give them back space at the front end in order to keep the category in front of consumers.

Their pitch is simple, some say. Give us more space at the front end and it will result in more profits than virtually any other category can deliver.

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