December 21, 2009 / 8:15 PM / 10 years ago

UPDATE 2-Weekend snowstorm cuts U.S. holiday sales upside

* Snowstorm cost U.S. retailers $2 bln- Planalytics

* NRF maintains forecast of 1 pct decline for season

* ComScore keeps forecast of 3 pct online sales rise

* Retail shares up 1.7 pct (Adds data on lost sales, updates shares)

By Phil Wahba

NEW YORK, Dec 21 (Reuters) - The heavy snowstorm that swept the East Coast of the United States over the weekend may have cost retailers the potential for any upside to holiday sales, industry experts said on Monday.

The storm forced store closures for several hours on Saturday and kept shoppers at home in major metropolitan areas such as Washington, D.C. and Philadelphia for at least part of the weekend, which had been expected to be one of the biggest shopping periods before Christmas.

The ability to shop online and the four days left before Christmas should allow shoppers to catch up on their gift buying, but that reduces the chances for impulse purchases.

“I’d look at it as an investor and say the storms all over the country are probably going to dampen the expectations for any kind of positive surprise that might have come out of this holiday season,” said Fred Dickson, director of retail research at D.A. Davidson & Co.

Tracking firm Planalytics estimated that the snowstorm cost U.S. retailers about $2 billion of sales they will not be able to recover.

But industry experts said neither in-store or online sales as a whole should be hugely affected. The National Retail Federation said on Monday it was keeping its forecast that U.S. retail sales would fall 1 percent to $437.6 billion this holiday season from a year ago.

“The impact of this storm on the East Coast isn’t enough to make a dent into large retailers’ national sales,” said NRF spokeswoman Kathy Grannis.

Retail shares tracked by the Standard & Poor’s Retail Index .RLX rose 1.7 percent on Monday. Shares of Amazon.com (AMZN.O) gained 3.4 percent on hopes of an even stronger showing by the web retail leader due to the storm.

A majority of consumers surveyed over the weekend said they were shopping as much or less online this holiday season, according to questions posed on behalf of Reuters by America’s Research Group. [ID:nN21231855]

Tracking firm comScore (SCOR.O) said it was not changing its forecast for a 3 percent rise in online holiday sales. Even if shopper demand was up over the weekend, not every retailer would be equipped to handle the requests, said comScore director Andrew Lipsman.

“I expect the needle to move but I don’t know that we’ll see massive change,” he said.

Discount retailer Target Corp (TGT.N) and bookseller Borders Group Inc BGP.N extended their business hours between Monday and Wednesday in areas hit by the snowstorm.

WINNERS AND LOSERS

On a larger scale, discount stores and electronics chains continue to be the big winners this season.

Nearly 56 percent of the 1,000 U.S. consumers surveyed over the weekend by America’s Research Group said they had shopped at Wal-Mart (WMT.N). Other big draws included Sears SHLD.O, where more than 22 percent of people shopped, Target (TGT.N) and Best Buy (BBY.N).

Shares of Wal-Mart rose 1 percent on Monday, while Target gained 2.3 percent and Sears rose 3.2 percent.

Wal-Mart also appeared to be a winner for the entire season, based on its ability to get shoppers to return to its stores over the shopping season. Other retailers winning repeat visits from consumers included Target, J.C. Penney (JCP.N) and TJX Co’s (TJX.N) TJ Maxx chain.

Consumers still eschewed luxury and big ticket items. Saks Inc SKS.N and Home Depot Inc (HD.N) lured less than half of their customers for a repeat visit.

The storm’s impact could affect the fortunes of some individual retailers, helping those with strong websites and hurting chains with heavy store exposure on the East Coast.

Erika Maschmeyer, a senior research analyst with Robert W. Baird & Co, said that Gap Inc (GPS.N) may have suffered from the weekend’s weather disruptions because of its heavy presence on the East Coast, while Nordstrom Inc (JWN.N) only has about 14 percent of its stores in the region.

Shares of Gap rose 0.6 percent, while Nordstrom gained 3.1 percent.

“Overall, it puts a damper on retail expectations — snow hurts traffic, and if shoppers are not in stores they’re not as likely to make an impulse purchase,” she said

Shoppers choosing to expedite online purchases could provide a slight lift to FedEx Corp (FDX.N) and United Parcel Service Inc (UPS.N), said Kurt Brunner, a portfolio manager at Swarthmore Group in Philadelphia. Shares of FedEx slipped 0.3 percent on Monday, while UPS rose 1.1 percent. (Additional reporting by Edward Krudy and Leah Schnurr; Editing by Michele Gershberg and Steve Orlofsky)

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