Hurricane Irene exposed the new thriftiness Americans have adopted during the economic downturn. In previous years, people might have just stuffed the extra emergency supplies into their cupboards. But stagnant wages, high unemployment and a volatile stock market have turned spenders into penny pinchers.
So far, Hurricane Irene gave an unexpected windfall to home-improvement chains and grocers and a blow to department and clothing stores. Stores aren’t eager to give back those sales, but they also don’t want to alienate their shoppers by being difficult to deal with.
The storm also caused problems with the supply chain, according to an Avanade retail expert.
“People go nuts when there’s going to be a natural disaster. They buy a bunch of batteries and stores have a run on this stuff. The whole supply chain is affected,” he said.
After stores do a daily replenishment order, the suppliers send out new products to the distribution center and they’re met at the store with a crowd returning their unused supplies.
“You need a really smart buying department that knows this, that looks at this and says ‘OK, let’s not overreact to this. We’ve had a huge spike in demand. Let’s not go crazy replenishing because we know it’s a blip,’ ” the expert said.
Source: Today, August 2011