Weathermen have been known to get a bit overzealous with their predictions of weather-related doom and gloom.
Everyone remembers the snowpocalypse that wasn’t in March 2014, when weathermen warned New Yorkers to prepare for a winter storm straight out of the movie The Day After Tomorrow only to have that end-of-the-world weather turn out to be seven inches of gently falling snow. Boston and the areas surrounding New York didn’t get quite as lucky and were actually buried under more than a foot of snow, but the damage was done. Weathermen all over the tri-state area had to live with millions of residents mocking them as the boys and girls who cried wolf — or in that case, blizzard.
But sometimes storms live up to their billing, and this week’s so-called bomb cyclone is shaping up to be one of those storms. Despite a name that drew a fair amount of mockery on Twitter during its run-up, it’s hard to look at the numbers and argue that the weather pattern that pummeled the east coast this week did anything short of detonating.
The storm affected 60 million people in 15 different states stretching from Maine to Florida, with 13 million people in the direct path of the blizzard warnings. The total stretch of land covered by the storm was 1,400 miles long and brought snow to places like Tallahassee, Florida, which literally hasn’t seen snow in a generation. While Florida got a dusting, places like Charleston, South Carolina, saw what palm trees look like with six inches of snow on them. We imagine they are still figuring out how shovel technology even works. Maybe ask Alexa?
The tallies and wind speeds were higher and more impressive the further north it traveled. Parts of New York and New Jersey were looking at snow-related tallies of at least a foot. The winds in Nova Scotia whipped around at 80 miles an hour, and then there was the flooding.
Boston, in its ongoing quest to suffer more than any other American city in the winter, didn’t just have more than a foot of snow and more than 50-mile-an-hour winds. It also saw the storm surge push most of the ocean inland and put most of downtown underwater. Have you ever sees a raft with people in it traveling down one of Boston’s busy main streets?
As is often the case with exercises in action movie weather, the great bomb cyclone of 2018 will be a costly time for vast segments of the retail economy. There will be plenty of downsides to go around, but, surprisingly, a lot of upsides as well.
The Expected Costs
Catastrophic weather incidents, particularly those that bring lots of wind and ice, are never good news.
Power providers dealing with hundreds of thousands of outages up and down the east coast, in temperatures expected to remain unusually frigid for the next few days, prompted a run on firewood the likes of which has never been seen. In fact, deliveries of firewood now have a two-week wait in Boston and its surrounding areas.
And pity the poor person who does happen to suffer a catastrophe with respect to his heating system or frozen and/or burst pipes. Plumbing and heating contractors were taking emergency calls only, meaning they did only enough to pull the emergency back from the brink. The volume of those calls was so overwhelming that none of them are taking appointments until next week to actually fix underlying problems.
Those who tried to stay warm by buying space heaters also found themselves out of luck, because units were sold out at local hardware stores and home centers. Amazon to the rescue, though, as there were plenty to be had with free two-day shipping.
Then there’s the never-ending stream of fender-benders caused by drivers who shouldn’t be out on the roads during bad weather but do so anyway, especially folks living in states where snow and ice are as rare as a solar eclipse.
Or those who stayed put and keep their cars parked on the streets, only to have them flooded by ocean surges that turned said streets into rivers in coastal towns.
It’s safe to say insurance companies tend not to like 15-state snow storms, and individuals whose houses have been damaged by flooding or downed trees likely feel the same. We can only hope claims adjusters use push payments when paying out those claims.
Physical retail and restaurants are also broadly expected to take a hit, since people don’t often shop or eat out during a snowstorm — particularly one followed by an unusually frigid cold snap, as this one will be.
The good news is the damage is not as bad as it might have been. Had the same storm hit three weeks ago, it would have occurred during the tail end of the holiday shopping rush and would have represented a retail catastrophe. Because it hit at the beginning of January, this storm will more likely register as a small blip on the retail screen than anything else.
Analysts expected the storm to shift some retail patterns over the next few weeks, too, as larger retailers move stock to areas not normally impacted by the cold. We imagine this is good news for the people of Georgia who are deciding to purchase their first winter hats right about now.
All in, experts do believe the great east coast snow out will have an impact on retail, though — particularly when it comes to foot traffic in physical stores in affected states — but that those effects will be somewhat muted. Plus, a closer look at other results indicated the dropping temperatures and blasting cold weather have provided a positive sales boon for some merchants.
The Unexpected Bounces
For example, if one was in the business of selling egregiously expensive down-filled coats, last week was a very nice coda to a busy holiday season.
Canadian winter coat manufacturer Canada Goose’s stock rose more than 3 percent in trading Wednesday (Jan. 3) and reached its highest level since the brand’s initial public offering (IPO) last year. Media outlets reported customers in New York City were lined up around the block for a chance to buy themselves a $1,000 winter coat.
“We’ve been really busy for the past few weeks,” a security guard at the store told Barron’s.
And the retailer isn’t the only one that’s been busy, based on recent stock performances.
Dominoes, the nation’s largest pizza chain, had its own blizzard bump with shares up 5 percent to go along with the storm after a few days of decline. Papa John’s stock was also up approximately 5 percent, and Pizza Hut’s parent company Yum Brands saw its own increase nearly 10 percent, too.
It also seems comfort food had a good day on the whole. Mondelez International — the conglomerate behind Oreos, Chips Ahoy, Ritz Crackers, Triscuits and Cadbury chocolate — also enjoyed a boost as the snowy weather hit, because sometimes the only way to power through shoveling all that snow is with a promise of cookies as a reward.
Or soup, which is likely why Campbell’s Soup Company turned around five days of stock price declines on blizzard day. It doesn’t hurt that it owns Pepperidge Farms and also sells bread, which almost all consumers buy the day before a big storm hits.
Milk, bread and eggs are the holy trifecta of storm preparedness — and any decent French toast recipe — and yes, to the degree this can be tracked, the storm may even have had a slight effect on milk stocks. Syngenta and Dean Foods, the nation’s two main producers of dairy products, both saw their stocks bounce up on Wednesday, the day before the storm, when the great milk buying frenzy overtook the east coast.
So, to recap: It appears Americans stocked up on pizza, Oreos, soup and milk to ride out the storm, if stock market data is to be believed.
There are worse ways to spend a blizzard.