Retailers Brace for Hurricane Irma, Potential $1.45B Sales Loss
Hurricane Irma, the strongest storm in the Atlantic Ocean on record — which at the time of writing is forecast to be heading towards the coasts of Florida — is expected to cause retailers serious grief.
According to Planalytics, Irma is very different, and potentially more damaging, than Hurricane Harvey, which last month devastated Houston. Florida has declared a state of emergency, with some areas, such as the Florida Keys and the Miami-Dade area currently evacuating.
While Harvey was a major hurricane (Category 4) , the impacts were primarily driven by flooding. Irma is a larger storm in size as well as a stronger storm, meaning that damages will be driven by high winds and storm surge. Furthermore, the population currently under threat in Florida — Miami, Fort Lauderdale, Orlando and Tampa — is three times the size impacted by Harvey. Irma is also threatening the Southeast, including major markets such as Columbia, S.C., Charleston, S.C., and Charlotte, N.C.
Most retailers in the forecast path of Hurricane Irma have plans in place, according to Planalytics, and are currently in "execution mode." In most cases, inventory managers and supply chain professionals are actively working to meet demand and ensure product availability during and after the storm.
“At this moment, retailers’ priority should be to plan for store closures and make sure their staff has an evacuation plan,” said Tushar Patel, chief marketing officer of Kibo, an omnichannel commerce platform provider. ”Retailers should [also] be clearly communicating their closure plans to the community so they can plan ahead and prepare. If possible (and not putting staff in danger), offer extended hours and once the stores are closed, move inventory to a safer location.”
After the storm has passed, Patel suggested that retailers look to pop-up stores within larger retail locations that weren't impacted as a quick strategy to maintain their business and offer immediate items to consumers while their communities rebuild.
“The advantage of the omnichannel retail world we're in is that retailers don't need to be out of business when one channel is affected by natural disasters like [Hurricanes] Harvey or Irma,” he said. “They can use their digital networks to best serve their physical networks and ensure they continue to offer their customers the items they will need to recover from the storm.”
All is not bad news for retailers during Irma. The threat of the storm is driving increased traffic into home improvement centers, grocery stores, mass merchants/warehouse clubs, and gas stations/convenience stores. Some major retail and restaurant chains with a large percentage of their store base under threat from Irma include Stage Stores (26 percent), West Marine (18 percent), Bloomin’ Brands (15 percent), Stein Mart (13 percent) and BJ’s Wholesale Club (13 percent).