Barron's Picks up on the "Retail Snow Job"
Here's what they ran:
DECEMBER 17 -- Some analysts and CFOs have taken to blaming sluggish sales on the two snowstorms that have recently hit the Northeast. You can already hear the rumblings and excuses being trotted out. This is, for the most part, nonsense. Here's a news flash: It snows in the winter, especially in the northern parts of the country. People who live in the North are used to it . . . So should retailers, and they must learn to plan accordingly.
Of course, the Home Depots of the world sold a lot more shovels and snow blowers that weekend, which may leads to cries of "broken window" thesis, but when applied to Christmas shopping, that theory is a fallacy. A hardy and determined lot, holiday shoppers are hardly dissuaded by their 'finite' resources. The key underlying flaw of all economics -- the theoretical "rational consumer" -- is nonplussed by mere lack of cash. Social and familial obligations of gift exchanges reduce the elasticity of "the Xmas list" by a large measure.
Thus, everyone you know will get everything on their X-mas shopping list by December 25th, come sleet, snow, debt, gloom of night, etc. If the snow kept them from the mall, than they shopped online. If they run out of cash, then they will charge their purchases. It's always dangerous to rely on anecdotal evidence, but this is a query into the fundamental nature of the American consumer. Will a little snow -- or a lot, for that matter -- prevent grandma from getting her grandkids their gifts? "Susy and Bobby, here are your Christmas gifts sorry little Debbie, but it snowed. Maybe next year . "
Last I checked, the Internet does not close for "snow." Whether that means Wal-Mart's and Sears' loss becomes Amazon's and eBay's gain, we have yet to see. Last I checked, Wal-Mart and Best Buy had web sites. Suffice it say that a determined shopper can get whatever they want delivered by December 25th -- online or off.
May we please retire the pathetic snow canard now? Thank you.
Retail Snow Job
Market Watch Today
December 18, 2003 2:28 p.m. EST
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