Hurricane Irma is currently terrorizing the Caribbean and is headed for the southern United States this weekend.
In a webcast Friday morning, weather analytics firm Planalytics said Irma could have an even more substantial impact on retail than Hurricane Harvey did.
Irma, even though it was just downgraded from a Category 5 storm to a Category 4, is the strongest storm on record in the Atlantic, according to Planalytics senior VP Evan Gold. And Jose, the Category 4 hurricane right on its heels, is making it the first time on record that there have been two hurricanes with sustained winds above 150 miles per hour in the Atlantic at the same time.
At present, the entire state of Florida, major markets in Atlanta, parts of Tennessee and Nashville, most of Mississippi and parts of the Carolinas are at risk. According to Planalytics, at least 20 million people are at risk as a result of this weather-induced bedlam.
“The potential economic impact from a retail perspective is now, we’re estimating, as $2.75 billion,” Gold said. “Those are activities, economic activities, retail related activities that do not come back.”
Planalytics had estimated Wednesday that the toll on retail sales as a result of Irma would be $1.45 billion, but that estimate quickly escalated as it became clearer how damaging the storm has been.
The situation is evolving, of course, but if that estimated impact on retail sales is close to accurate, that would be nearly triple the estimated $1 billion in lost sales expected to result from Harvey.
For now, pre-storm purchasing is the focus for consumers in areas set to brace for a beating, and once the storms pass, sales of things like chainsaws and emergency-related equipment will pick up.
Still far from over, Hurricane Harvey has U.S. manufacturing and spending taking a hit and logistics nightmares thanks to impassable roadways and railways, which meant delayed deliveries in and out of hard hit areas. More of the same could be expected in Irma’s wake.
[Read more about Harvey’s impact on manufacturing: U.S. Manufacturing and Spending Seen Taking Short-Term Hit From Hurricane Harvey’s Impact]
Planalytics said retailers with stores in locations expecting to be hit should reach out to their respective client support teams or to Planalytics for insights specific to their businesses.
“This clearly is a major historic event,” Gold said “We will continue to monitor evolve and update that potential economic impact.”