Snowy Massachusetts Winter Causes Retail Losses in the Hundreds of Millions, Association Says

By Michael Kuhne, AccuWeather.com Staff Writer

March 12,2015; 10:13PM,EDT

 

With much of New England still ensnared by heaps of snow and ice following this winter's relentless barrage of storms, Massachusetts business owners are still struggling to recover recent losses in sales totaling hundreds of millions of dollars across the state.
"We're looking at a wide variety for retail and restaurants; there has been a 22 percent drop in sales," Retailers Association of Massachusetts President Jon Hurst said, citing a recent survey conducted.
"Essentially there has been a month loss of retail sales," he said, stating this totals a loss of hundreds of millions of dollars.
While harsh winter weather is not unexpected in New England during the months of January and February, it has been the constant barrage of storms that has kept employees confined and unable to attend their jobs, store fronts closed and consumers away from the shops and restaurants.
More than 105 inches has slammed the Boston area this season as of early March.
"It was the fact that this has been sustained over a longer period of time," Hurst said. "You do not expect it to be as intense as it was over a three- to four-week period."
In this Feb. 11, 2015, file photo, commuters walk past piles of snow in front of Au Chocolat in downtown Boston. During the series of storms, some retail businesses are struggling as messy roads and traffic jams have driven consumers away. (AP Photo/Bill Sikes)
Some businesses have it much worse, he added, referring to a furniture retailer who has reported a 50 percent decline in sales due to the harsh winter weather from January through February.
"There are always winners and losers in this type of bad weather," Hurst said, adding that it greatly depends on the services a business provides.
"We've seen some extreme events throughout the U.S. which are affecting retailers," AccuWeather Enterprise Solutions Senior Research Analyst Rosemary Radich said.
During times of heavy snowfall, especially in areas that are not used to large amounts of snow and ice, severe weather causes a peak in products such as food, water, batteries and snow removal equipment, she added.
"Clothing retailers who specialize in winter clothing are seeing significant boosts in sales, especially compared to last year," Radich said.
However, with nearly one third of sales being impulse buys, Hurst said there is no way the overall profitability can be recovered, even as consumer confidence builds in the region as the snow begins to melt.
"Generally speaking, it's nearly impossible to recover," he said.
A pair of bulldozers sit on a giant snow pile at a "snow farm" in Boston, Saturday, Feb. 14, 2015. (AP Photo/Michael Dwyer)
Even after Massachusetts Gov. Charlie Baker declared the week following Saturday's Valentine's Day, "Valentine's Week," many businesses saw little to no increase in store traffic as the frigid air and troublesome road conditions kept consumers confined indoors for one of the season's busiest holidays.
On average February's total retail sales are under $10 billion, but Valentine's Day alone accounts for nearly a half a billion dollars each year, he said.
The Valentine's Day holiday saw another storm sweep across the area, which put a major dent in the 2015 sales.
"You can estimate that roughly 20 percent didn't occur," he said.
According to Boston's Phillips Candy House manager Mary Ann Nagle, this year has been the worst for winter weather and retail sales since the February Blizzard of 1978, in which former state Gov. Michael Dukakis declared a similar Valentine's Day encouragement to aid area businesses.
Philips Candy House has been in business since 1925 and provides their customers with hand crafted chocolates, fudge and specialty chocolate-turtles, Nagle said. Nagle is the granddaughter of the company's founder.
"We were actually closed three days, and on the days we were open, there was no store traffic," she said, citing a 15 percent decrease in sales.
The problem following the actual storms has been the congested streets and poor road conditions, which have proved troublesome, she added.
Nagle said that the storm disrupted not only the consumers but impeded many of the company's employees from getting to work, which is essential in preparing for Valentine's Day, a process that takes many days of work leading up to the holiday week for Phillips Candy House.
"We have people that live nearby and we picked up people," Nagle said. "We have a wonderful staff and you need to continue."
Unfortunately, following Feb. 14, Nagle said the business did not see much more of a demand for their heart-shaped boxes and Valentine's Day chocolates, and they were marked down as usual.
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The poor road conditions have proved difficult for flower deliveries as well, according to Boston's Olympia Flower Store Owner Joe Bornstein.
"The streets are just so narrow," he said.
Founded in 1903, Bornstein now runs the business his grandfather started.
"We've have a little less walk-in trade," Bornstein said, but added that online sales and delivery are going strong.
Bornstein said he did not see much in an increased demand following Valentine's Day, one of the busiest days of the year for him, but said his sales and deliveries were much better than he expected considering the poor weather conditions.
"Valentine's Day was pretty close to last year, which kind of surprised me," he said. "It worked out pretty well and we didn't even have any frozen flowers."
Bornstein said he is hoping that the onset of spring will boost eagerness among those who have been confined by the winter weather, and prompt customers to begin planting early.
Kim Taylor, of Norwood, Mass., right, shovels a path in the snow in front of her home Sunday, Feb. 15, 2015, in Norwood. (AP Photo/Steven Senne)
In recognizing the hardship that small businesses have faced due to the recent wintry weather, Governor Charlie Baker and Lieutenant Governor Karyn Polito announced that the Massachusetts Growth Capital Corporation has approved a snowstorm loan fund to help small businesses regain financial stability and recover from lost storm revenue, according to their announcement in a Feb. 27 press release.
Hurst said he believes these type of short-term loans will help many of the small businesses still reeling from cash flow issues and be worthwhile as consumer confidence increases for the spring.
"The retail calendar goes in cycles with the seasons," Hurst said. "Spring is coming [along] with sunshine and melting, and things are looking up."
"As small businesses throughout Massachusetts continue to recover from extreme winter weather conditions that have restricted business, we are pleased to announce this low-interest loan program is available to help them regain their financial stability," said Governor Baker said in the press release.
"While our local economies continue to bounce back, we encourage everyone to continue shopping at their local retailers, restaurants and small businesses."
According to Radich, many Americans are tired of winter and are ready for spring, so when spring weather does hit, many spring retailers will see a large boost in sales.
"Areas that have been plagued with low temperatures, snow and ice will see the most dramatic increases," Radich said. "Businesses such as restaurants with outdoor dining, retailers with spring clothing and any type of outdoor entertainment will all see positive spring weather impacts."